<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 20, 1995
REGISTRATION NOS. 33-63279 AND 33-63279-01
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 3
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
ROUSE CAPITAL THE ROUSE COMPANY
(Exact name of registrant as specified (Exact name of registrant as specified
in its charter) in its charter)
DELAWARE MARYLAND
(State or other jurisdiction of (State or other jurisdiction of
incorporation or organization) incorporation or organization)
52-0735512
52-1946034 (I.R.S. Employer Identification No.)
(I.R.S. Employer Identification No.) 10275 LITTLE PATUXENT PARKWAY
C/O THE ROUSE COMPANY COLUMBIA, MARYLAND 21044-3456
10275 LITTLE PATUXENT PARKWAY (410) 992-6000
COLUMBIA, MARYLAND 21044-3456 (Address including zip code, and
(410) 992-6000 telephone number,
(Address including zip code, and including area code, of registrant's
telephone number, principal executive offices)
including area code, of registrant's
principal executive offices)
---------------
BRUCE I. ROTHSCHILD
VICE PRESIDENT,
GENERAL COUNSEL AND SECRETARY
10275 LITTLE PATUXENT PARKWAY
COLUMBIA, MARYLAND 21044-3456
(410) 992-6000
(Name, address including zip code, and telephone number,
including area code, of agent for service)
---------------
COPIES TO:
TIMOTHY E. PETERSON JOSEPH C. SHENKER
FRIED, FRANK, HARRIS, SHRIVER & SULLIVAN & CROMWELL
JACOBSON 250 PARK AVENUE
ONE NEW YORK PLAZA NEW YORK, NEW YORK 10177
NEW YORK, NEW YORK 10004 (212) 558-4000
(212) 859-8000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: As soon as
practicable after the Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
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CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
PROPOSED
PROPOSED MAXIMUM
AMOUNT MAXIMUM AGGREGATE AMOUNT OF
TITLE OF SECURITIES TO BE AGGREGATE PRICE OFFERING REGISTRATION
TO BE REGISTERED REGISTERED(1) PER SECURITY(2)(3) PRICE(2)(3) FEE(4)
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<S> <C> <C> <C> <C>
Rouse Capital % Cumulative Quarterly 5,750,000
Income Preferred Securities.............. Preferred $25.00 $143,750,000 $49,569
Securities
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The Rouse Company Guarantee with respect to
Rouse Capital % Cumulative Quarterly
Income Preferred Securities (5)(6).......
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The Rouse Company % Junior Subordinated
Debentures due 2025 (7)..................
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Total..................................... 5,750,000
Preferred $25.00 $143,750,000 $49,569
Securities
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</TABLE>
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(1) Includes 750,000 Preferred Securities subject to the Underwriters' over-
allotment option.
(2) Estimated solely for the purpose of determining the registration fee
pursuant to Rule 457(a) and (n).
(3) Exclusive of accrued interest and distributions, if any.
(4) $39,656 has previously been paid.
(5) No separate consideration will be received for The Rouse Company Guarantee
or Expense Agreement.
(6) This registration is deemed to include the rights of holders of the
Preferred Securities under the Guarantee, the Trust Agreement, the Junior
Subordinated Debentures, the Indenture and the Expense Agreement, together
constituting the backup undertakings as described in the Registration
Statement.
(7) The Junior Subordinated Debentures will be purchased by Rouse Capital with
the proceeds of the sale of the Preferred Securities. No separate
consideration will be received for the Junior Subordinated Debentures.
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(a), MAY DETERMINE.
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<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED NOVEMBER 20, 1995
5,000,000 PREFERRED SECURITIES
ROUSE CAPITAL
% CUMULATIVE QUARTERLY INCOME PREFERRED SECURITIES (QUIPS*)
(LIQUIDATION AMOUNT $25 PER PREFERRED SECURITY)
GUARANTEED TO THE EXTENT ISSUER HAS FUNDS AS SET FORTH HEREIN BY
THE ROUSE COMPANY
-----------
The % Cumulative Quarterly Income Preferred Securities (the "Preferred
Securities") offered hereby represent preferred undivided beneficial interests
in the assets of Rouse Capital, a statutory business trust formed under the
laws of the State of Delaware (the "Issuer" or the "Trust"). The Rouse Company,
a Maryland corporation ("Rouse" or the "Company"), is the owner of the common
securities (the "Common Securities") representing undivided beneficial
interests in the assets of the Issuer. The First National Bank of Chicago and
Michael J. Majchrzak are the Property Trustee and the Delaware Trustee,
respectively, of the Issuer. The Issuer exists for the sole purpose of issuing
the Preferred Securities and the Common Securities and investing the proceeds
thereof in % Junior Subordinated Debentures due 2025 (the "Junior
Subordinated Debentures") issued by Rouse, and the ability of the Issuer to
make distributions and pay other amounts on the Preferred Securities is solely
dependent
(continued on next page)
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SEE "RISK FACTORS" BEGINNING ON PAGE 13 HEREOF FOR CERTAIN INFORMATION
RELEVANT TO AN INVESTMENT IN THE PREFERRED SECURITIES, INCLUDING THE PERIOD AND
CIRCUMSTANCES DURING WHICH AND UNDER WHICH PAYMENT ON THE PREFERRED SECURITIES
AND THE JUNIOR SUBORDINATED DEBENTURES MAY BE DEFERRED AND THE RELATED UNITED
STATES FEDERAL INCOME TAX CONSEQUENCES.
-----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED ON OR ENDORSED THE
MERITS OF THIS OFFERING. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
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<TABLE>
<CAPTION>
INITIAL PUBLIC UNDERWRITING PROCEEDS TO THE
OFFERING PRICE COMMISSION (1) ISSUER (2)(3)
-------------- -------------- ---------------
<S> <C> <C> <C>
Per Preferred Security........... $ (2) $
Total (4)........................ $ (2) $
</TABLE>
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(1) The Issuer and Rouse have agreed to indemnify the several Underwriters (as
defined in "Underwriting") against certain liabilities, including
liabilities under the Securities Act of 1933, as amended. See
"Underwriting".
(2) In view of the fact that the proceeds of the sale of the Preferred
Securities will be used to purchase the Junior Subordinated Debentures, the
Underwriting Agreement provides that Rouse will pay to the Underwriters, as
compensation ("Underwriters' Compensation") for their arranging the
investment therein of such proceeds, $ per Preferred Security (or $ in
the aggregate). See "Underwriting".
(3) Expenses of the offering, which are payable by Rouse, are estimated to be
$608,369.
(4) The Issuer and Rouse have granted the Underwriters an option for 30 days to
purchase up to an additional 750,000 Preferred Securities at the initial
public offering price per Preferred Security, solely to cover over-
allotments. Rouse will pay Underwriters' Compensation in the amount per
Preferred Security set forth in Note 2 with respect to each such additional
Preferred Security. If such option is exercised in full, the total Initial
Public Offering Price, Underwriting Commission and Proceeds to the Issuer
will be $ , $ and $ , respectively. See "Underwriting".
-----------
The Preferred Securities offered hereby are offered severally by the
Underwriters, as specified herein, and subject to receipt and acceptance by
them and subject to their right to reject any order in whole or in part. It is
expected that delivery of the Preferred Securities will be made only in book-
entry form through the facilities of DTC on or about , 1995.
- -----
* QUIPS is a servicemark of Goldman, Sachs & Co.
GOLDMAN, SACHS & CO.
ALEX. BROWN & SONS
INCORPORATED
LEHMAN BROTHERS
MERRILL LYNCH & CO.
SMITH BARNEY INC.
-----------
The date of this Prospectus is , 1995.
<PAGE>
[ART]
2
<PAGE>
(continued from previous page)
upon Rouse making payments on the Junior Subordinated Debentures as and when
required. Such payments on the Junior Subordinated Debentures, if made in
accordance with the terms of the Indenture (as defined under "Description of
the Preferred Securities--Distributions"), will provide funds sufficient to
enable the Issuer to make distributions and pay other amounts on the Preferred
Securities. See "Relationship Among the Preferred Securities, the Junior
Subordinated Debentures and the Guarantee--General". The holders of the
Preferred Securities will have a preference, with respect to cash
distributions and amounts payable on liquidation, redemption or otherwise over
the holders of the Common Securities issued by the Issuer only if there is an
Event of Default (as defined under "Description of the Preferred Securities--
Events of Default; Notice"). See "Description of the Preferred Securities--
Subordination of Common Securities" and "--Liquidation Distribution Upon
Dissolution".
Holders of the Preferred Securities will be entitled to receive cumulative
cash distributions accruing from the date of original issuance and payable
quarterly in arrears on March 31, June 30, September 30 and December 31 of
each year, commencing December 31, 1995, at the rate of % per annum of the
liquidation amount of $25 per Preferred Security. Rouse has the right to defer
payments of interest on the Junior Subordinated Debentures by extending the
interest payment period thereon at any time for up to 20 consecutive quarters
(each an "Extension Period"). If interest payments are so deferred,
distributions on the Preferred Securities will also be deferred. During an
Extension Period, distributions will continue to accrue and holders of
Preferred Securities will be required to accrue interest income for United
States federal income tax purposes. See "Description of the Junior
Subordinated Debentures--Option to Extend Interest Payment Period" and
"Certain United States Federal Income Tax Considerations--Potential Extension
of Interest Payment Period and Original Issue Discount".
The payment of distributions out of moneys held by the Issuer and payments
on liquidation of the Issuer or the redemption of Preferred Securities, as set
forth below, are irrevocably guaranteed to the extent set forth herein by
Rouse (the "Guarantee"). See "Description of the Guarantee". If Rouse fails to
make interest payments on the Junior Subordinated Debentures held by the
Issuer, the Issuer will not have sufficient funds to pay distributions on the
Preferred Securities. The Guarantee does not cover payment of distributions
when the Issuer does not have sufficient funds to pay such distributions. In
such event, the remedy of a holder of Preferred Securities is to enforce the
rights of the Issuer under the Junior Subordinated Debentures held by the
Issuer. Rouse's obligations under the Guarantee are subordinated and junior in
right of payment to all other liabilities of Rouse (including the Junior
Subordinated Debentures) except any liabilities that may be made pari passu
with or subordinate to the Guarantee expressly by their terms. Rouse has,
through the Guarantee, the Trust Agreement (as defined under "Rouse Capital"),
the Junior Subordinated Debentures, the Indenture and the Expense Agreement
(as defined under "Description of the Guarantee--The Expense Agreement"),
taken together, fully, irrevocably and unconditionally guaranteed all of the
Issuer's obligations under the Preferred Securities.
The Preferred Securities are subject to mandatory redemption upon repayment
of the Junior Subordinated Debentures at maturity or their earlier redemption,
at $25 per Preferred Security plus accumulated and unpaid distributions to the
Redemption Date (as defined under "Description of the Preferred Securities--
Redemption Procedures"), whether or not earned or declared, to the date of
payment. See "Description of the Preferred Securities--Redemption". Rouse will
have the option at any time on or after , 2000 to redeem the Junior
Subordinated Debentures, in whole or in part, with the proceeds of one or more
Equity Issuances (as defined under "Description of the Preferred Securities--
Redemption"), at a cash redemption price of 100% of the principal amount
thereof, plus accrued interest to the date of redemption. Rouse also will have
the right at any time, upon the occurrence of a Tax Event (as defined under
"Description of the Preferred Securities--Redemption"), to redeem the Junior
Subordinated Debentures, in whole but not in part. See "Description of the
Junior Subordinated Debentures--Optional Redemption".
The Junior Subordinated Debentures are subordinated and junior in right of
payment to all Senior Indebtedness (as defined under "Description of the
Junior Subordinated Debentures--Subordination") of Rouse. As of September 30,
1995, Rouse had approximately $541 million of principal amount of Senior
Indebtedness. Because Rouse is a holding company whose assets consist
substantially of the stock of its subsidiaries, the Junior Subordinated
Debentures are also structurally subordinated and junior in right of payment
to indebtedness for money borrowed and capitalized lease obligations of
Rouse's subsidiaries which aggregated $2,077 million at September 30, 1995.
The terms of the Junior Subordinated Debentures do not limit Rouse's ability
to incur additional Senior Indebtedness or subsidiary indebtedness. See
"Description of the Junior Subordinated Debentures--Subordination".
In the event of the liquidation of the Issuer, the holders of the Preferred
Securities will be entitled to receive for each Preferred Security a
liquidation preference of $25 plus accrued and unpaid distributions thereon,
whether or not earned or declared, to the date of payment (the "Liquidation
Amount"), subject to certain limitations, unless in connection with such
liquidation, Junior Subordinated Debentures are distributed to the holders of
Preferred Securities. See "Description of the Preferred Securities--
Liquidation Distribution Upon Dissolution".
The Preferred Securities have been approved for listing on the New York
Stock Exchange, subject to notice of issuance, under the symbol "RSEPrZ".
The Preferred Securities will be represented by global certificates
registered in the name of The Depository Trust Company ("DTC") or its nominee.
Beneficial interests in the Preferred Securities will be shown on, and
transfers thereof will be effected only through, records maintained by
participants in DTC. Except as described herein, Preferred Securities in
certificated form will not be issued in exchange for the global certificates.
See "Description of Preferred Securities--Book-Entry-Only Issuance--The
Depository Trust Company".
---------------
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE PREFERRED
SECURITIES OFFERED HEREBY AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL
IN THE OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK
EXCHANGE, IN THE OVER-THE-COUNTER MARKET, OR OTHERWISE. SUCH STABILIZING, IF
COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
---------------
3
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
4
<PAGE>
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by, and should be read in
conjunction with, the more detailed information and financial data included
elsewhere or incorporated by reference in this Prospectus. Unless otherwise
specified, references herein to "Rouse" or "the Company" refer to The Rouse
Company and its consolidated subsidiaries. Prospective investors should
carefully read the entire Prospectus.
ROUSE CAPITAL
The Issuer is a statutory business trust recently formed under the laws of
the State of Delaware. All of the Issuer's Common Securities are owned by
Rouse.
The Issuer exists for the exclusive purposes of issuing the Preferred
Securities and the Common Securities, purchasing the Junior Subordinated
Debentures with the proceeds thereof and engaging in activities necessary or
incidental to the foregoing. The payment by the Issuer of distributions due on
the Preferred Securities is completely dependent on its receipt of interest
payments from Rouse on the Junior Subordinated Debentures.
THE ROUSE COMPANY
Rouse is one of the largest publicly-traded real estate companies in the
United States. Rouse develops, acquires, owns and manages income-producing
properties across the United States. At November 1, 1995, Rouse managed a
portfolio of operating properties consisting of retail centers and office,
mixed-use and other properties, totaling more than 58 million square feet in
almost 200 buildings. Rouse also develops and sells land primarily in and
around Columbia, Maryland.
THE OFFERING
Securities Offered..................
5,000,000 of the Issuer's % Cumulative
Quarterly Income Preferred Securities. In
addition, the Issuer and Rouse have
granted the Underwriters an option for 30
days to purchase up to an additional
750,000 Preferred Securities at the
initial public offering price, solely to
cover over-allotments.
Distributions....................... Distributions on the Preferred Securities
will be payable at a rate per annum of %
of the stated liquidation amount of $25
per Preferred Security and will cumulate
from , 1995. Subject to the
distribution deferral provisions
described in "--Distribution Deferral
Provisions" below,
distributions will be payable quarterly
in arrears on March 31, June 30,
September 30 and December 31 of each
year, commencing December 31, 1995.
Distributions that are in arrears for
more than one quarter will bear interest
at a rate per annum of %, compounded
quarterly. The ability of the
5
<PAGE>
Issuer to make distributions on the
Preferred Securities is solely dependent
on its receipt of interest payments from
Rouse on the Junior Subordinated
Debentures. Such payments, if made in
accordance with the terms of the
Indenture, will provide sufficient funds
to enable the Issuer to make
distributions and pay other amounts on
the Preferred Securities. See
"Description of the Preferred
Securities--Distributions" and "Relation-
ship Among the Preferred Securities, the
Junior Subordinated Debentures and the
Guarantee--General". The holders of the
Preferred Securities will have a
preference with respect to cash
distributions and amounts payable on
liquidation, redemption or otherwise over
the holders of the Common Securities only
if there is an Event of Default. See
"Description of the Preferred
Securities--Subordination of Common
Securities" and "--Liquidation
Distribution Upon Dissolution".
Distribution Deferral Provisions.... Rouse has the right, at any time and from
time to time, to extend any interest
payment period on the Junior Subordinated
Debentures for a period of up to 20
consecutive quarters, as described below
under "--Junior Subordinated Debentures".
Quarterly distributions on the Preferred
Securities would be deferred by the
Issuer (but would continue to accumulate
and would compound quarterly and
Additional Amounts (as defined under
"Description of the Preferred
Securities--Distributions"), intended to
provide quarterly compounding on
distribution arrearages, would also
accumulate) during any such period. If an
extension of an interest payment period
occurs, holders of Preferred Securities
will continue to accrue interest income
for United States federal income tax
purposes in advance of any corresponding
cash distribution. See "Risk Factors--
Option to Extend Interest Payment Period;
Tax Consequences" and "Certain United
States Federal Income Tax
Considerations--Potential Extension of
Interest Payment Period and Original
Issue Discount".
Liquidation Preference.............. $25 per Preferred Security, plus an
amount equal to any accumulated and
unpaid distributions (whether or not
earned or declared) to the date of
payment. See "Description of the
Preferred Securities--Liquidation
Distribution Upon Dissolution".
6
<PAGE>
Redemption.......................... Upon the repayment of any Junior
Subordinated Debentures, whether at
maturity or upon earlier redemption, the
proceeds from such repayment will be
applied to redeem Preferred Securities
and Common Securities having an aggregate
Liquidation Amount equal to the principal
amount of the Junior Subordinated
Debentures redeemed. 97% of such proceeds
will be allocated to the redemption of
Preferred Securities and 3% will be
allocated to the redemption of Common
Securities. The redemption price for each
Preferred Security selected for
redemption will be equal to $25 plus
accumulated and unpaid distributions to
the date of redemption, whether or not
earned or declared. Rouse has the option
to redeem the Junior Subordinated
Debentures (i) at any time on or after
, 2000, in whole or in part, with the
proceeds of one or more Equity Issuances
and (ii) at any time, in whole but not in
part, upon the occurrence of a Tax Event.
See "Description of the Preferred
Securities--Redemption" and "Description
of the Junior Subordinated Debentures--
Optional Redemption".
Guarantee...........................
Rouse will irrevocably guarantee, on a
subordinated basis and to the extent set
forth herein, the payment in full of (i)
accrued and unpaid distributions on the
Preferred Securities, if and only to the
extent the Issuer has funds sufficient to
make such payment therefor, (ii) the
Redemption Price with respect to the
Preferred Securities called for
redemption, if and only to the extent the
Issuer has funds sufficient to make such
payment and (iii) upon a voluntary or
involuntary dissolution, winding-up or
termination of the Issuer (other than in
connection with a redemption of all of
the Preferred Securities), the lesser of
(a) the aggregate Liquidation Amount, to
the extent the Issuer has funds
sufficient to make such payment, and (b)
the amount of assets of the Issuer
remaining available for distribution to
holders of the Preferred Securities in
liquidation of the Issuer. Rouse has,
through the Guarantee, the Trust
Agreement, the Junior Subordinated
Debentures, the Indenture and the Expense
Agreement, taken together, fully,
irrevocably and unconditionally
guaranteed all of the Issuer's
obligations under the Preferred
Securities. No single document standing
alone or operating in conjunction with
fewer than
7
<PAGE>
all of the other documents constitutes
such guarantee. It is only the combined
operation of these documents that has the
effect of providing a full, irrevocable
and unconditional guarantee of the
Issuer's obligations under the Preferred
Securities. See "Relationship Among the
Preferred Securities, the Junior
Subordinated Debentures and the
Guarantee--General". The Guarantee will
be unsecured and will rank (i)
subordinate and junior in right of
payment to all liabilities of Rouse
(including the Junior Subordinated
Debentures but excluding liabilities that
are made pari passu with or subordinate
to the Guarantee expressly by their
terms) and (ii) senior to Rouse's Series
A Convertible Preferred Stock,
liquidation value $50.00 per share, and
Rouse's common stock. The Guarantee is a
guarantee of payment and not of
collection. See "Risk Factors--Rights
Under the Guarantee" and "Description of
the Guarantee--General" and "--Status of
the Guarantee".
Voting Rights.......................
Generally, holders of the Preferred
Securities will not have any voting
rights. However, the vote of a majority
in aggregate Liquidation Amount of
outstanding Preferred Securities will be
required to approve any amendment to the
Trust Agreement or any proposed action by
the trustees thereunder that would (i)
adversely affect the powers, preferences
or special rights of the holders of the
Preferred Securities or (ii) cause the
dissolution, winding-up or termination of
the Issuer (other than pursuant to the
Trust Agreement). In addition, the
approval of at least a majority in
aggregate Liquidation Amount of
outstanding Preferred Securities is
required to approve (i) any amendment to
the Indenture that would adversely affect
the holders of the Preferred Securities
and (ii) any waiver of an Event of
Default under the Indenture or Rouse's
obligation to comply with any covenant
thereunder. If an Event of Default under
the Indenture has occurred and is
continuing the holders of at least 25% of
the aggregate Liquidation Amount of
outstanding Preferred Securities shall
have the right to declare the principal
of and interest on the Junior
Subordinated Debentures immediately due
and payable. See "Description of the
Preferred Securities--Voting Rights" and
"Description of the Junior Subordinated
Debentures--Events of Default".
8
<PAGE>
Distribution of Junior Subordinated
Debentures Upon the Occurrence of
Certain Events....................
In the event that (i) Rouse becomes
bankrupt or insolvent or is dissolved or
liquidated or (ii) a Tax Event occurs,
the Issuer may be dissolved and
liquidated and the holders of the
Preferred Securities and Common
Securities may receive, after
satisfaction of liabilities to creditors
of the Issuer, Junior Subordinated
Debentures having an aggregate principal
amount equal to the aggregate Liquidation
Amount of the outstanding Preferred
Securities (together with any Additional
Amounts, if applicable), in lieu of
payment of the aggregate Liquidation
Amount of such Preferred Securities and
Common Securities (together with any
Additional Amounts, if applicable), which
payment would be subject to such assets
of the Issuer available for distribution
after satisfaction of liabilities to
creditors. See "Description of the
Preferred Securities--Liquidation
Distribution Upon Dissolution".
Junior Subordinated Debentures...... The Junior Subordinated Debentures will
mature on , 2025, and will bear
interest at the rate of % per annum,
payable quarterly in arrears on March 31,
June 30, September 30 and December 31 of
each year, commencing December 31, 1995.
Such payment period may be extended from
time to time by Rouse (during which
period interest would continue to accrue
and compound quarterly) for a period of
up to 20 consecutive quarters (each, an
"Extension Period"). Prior to the
termination of any Extension Period of
less than 20 consecutive quarters, Rouse
may further extend the interest payment
period as long as such Extension Period,
as further extended, does not exceed 20
consecutive quarters and does not extend
beyond the maturity of the Junior
Subordinated Debentures. Upon the
termination of any Extension Period and
the payment of all amounts then due,
Rouse may select a new Extension Period,
subject to the terms of the preceding
sentence. No interest shall be due during
an Extension Period until the end of such
period. If Rouse extends an interest
payment period, Rouse will be prohibited
from paying dividends or distributions on
certain of its capital stock or other
securities and making certain other
restricted payments until quarterly
interest payments are resumed and all
accumulated and
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<PAGE>
unpaid interest (including any interest
payable to effect quarterly compounding)
on the Junior Subordinated Debentures is
brought current. The payment of the
principal of and interest on the Junior
Subordinated Debentures will be
subordinated in right of payment to all
Senior Indebtedness of Rouse. As of
September 30, 1995, Rouse had
approximately $541 million of principal
amount of Senior Indebtedness. In
addition, because Rouse is a holding
company whose assets consist
substantially of the stock of its
subsidiaries the Junior Subordinated
Debentures will be structurally
subordinated and junior in right of
payment to indebtedness for money
borrowed and capitalized lease
obligations of Rouse's subsidiaries,
which as of September 30, 1995 aggregated
$2,077 million. As described above under
"--Redemption", Rouse has the option to
redeem the Junior Subordinated Debentures
under certain circumstances. See
"Description of the Junior Subordinated
Debentures" and "Risk Factors--
Subordination of Guarantee and Junior
Subordinated Debentures; Limited
Preference Rights of Preferred
Securities".
Use of Proceeds..................... The Issuer will invest the proceeds
received from the sale of the Preferred
Securities and the Common Securities in
the Junior Subordinated Debentures. After
paying the expenses associated with the
offering made hereby, Rouse will use the
net proceeds to retire or reduce certain
of its outstanding debt, to fund
development projects and/or property
acquisitions, and for general corporate
purposes. See "Use of Proceeds".
Form of Preferred Securities........ The Preferred Securities will be
represented by a global certificate or
certificates registered in the name of
DTC or its nominee. Beneficial interests
in the Preferred Securities will be
evidenced by, and transfers thereof will
be effected only through, records
maintained by participants in DTC. Except
as described herein, Preferred Securities
in certificated form will not be issued
in exchange for the global certificate or
certificates. See "Description of the
Preferred Securities--Book-Entry-Only
Issuance--The Depository Trust Company".
Recent Developments................. The Company and certain of its affiliates
have been defendants in a lawsuit brought
in Louisiana state
10
<PAGE>
court in 1990. The plaintiff, Robert P.
Guastella Equities, Inc., a former tenant
at Riverwalk, a retail center in New
Orleans, Louisiana, which is owned and
operated by an affiliate of the Company,
alleged in the lawsuit that the
defendants breached plaintiff's lease for
the operation of a restaurant at
Riverwalk. In 1993, a jury returned a
verdict against the defendants upon which
judgment was entered by the trial court
on January 7, 1994, in the total net
amount of approximately $9,128,000 plus
interest from the date the suit was
filed. The trial court also entered an
amended judgment in which it awarded the
plaintiff $450,000 in attorneys' fees.
On May 23, 1994, the Company appealed
this judgment to the Louisiana Court of
Appeals, Fourth Circuit. On November 16,
1995, the Louisiana Court of Appeals
denied the Company's appeal in a 2 to 1
decision and left standing the judgment,
but reduced the judgment by $240,000. The
Company believes that the verdict and
judgment are contrary to the facts and
applicable law. The Company intends to
file a motion for reconsideration with
the Louisiana Court of Appeals and, if
that motion is denied, intends to
petition the Louisiana Supreme Court to
hear the appeal.
However, the Company has determined that
it will record in the fourth quarter of
1995 a pre-tax provision in the amount of
$12,316,000, representing the full amount
of the modified award (including
attorneys' fees) plus interest, less pre-
tax provisions previously recorded
totaling $1,150,000. The Company expects
that the provision will cause a net loss
for the fourth quarter and for the full
year 1995. The Company believes that the
ultimate disposition of this matter will
not have a material adverse effect on the
Company's consolidated financial position
or liquidity. The Company also believes
that the ultimate disposition of this
matter will not have a material adverse
effect on either the Company's or the
Issuer's ability to satisfy its
obligations under the Preferred
Securities.
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<PAGE>
SUMMARY FINANCIAL DATA OF ROUSE
The following summary financial information of the Company for the years
ended December 31, 1994, 1993 and 1992 and the nine months ended September 30,
1995 and 1994 was derived from the Company's consolidated financial statements
and five-year comparison of selected financial data contained in its Annual
Report on Form 10-K for the year ended December 31, 1994 and its Quarterly
Reports on Form 10-Q for the quarters ended September 30, 1995 and 1994 and is
qualified in its entirety by such documents. See "Incorporation of Certain
Documents by Reference". The selected financial information of the Company for
the years ended December 31, 1992, 1991 and 1990 was derived from the audited
consolidated financial statements of the Company for such periods and the
balance sheet information for the quarter ended September 30, 1994 was derived
from the unaudited consolidated financial statements of the Company for such
period which, in each case, have not been incorporated herein by reference.
Results for the nine months ended September 30, 1995 and 1994 are unaudited.
Results for the nine months ended September 30, 1995 are not necessarily
indicative of results for the year ending December 31, 1995. The following
financial information should be read in conjunction with the Company's
consolidated financial statements and notes thereto incorporated by reference
into and "Management's Discussion and Analysis of Financial Condition and
Results of Operations" included elsewhere in this Prospectus.
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
-------------------- -----------------------------------------------------
1995 1994 1994 1993 1992 1991 1990
--------- --------- --------- --------- --------- --------- ---------
(IN THOUSANDS, EXCEPT RATIOS AND PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
Operating results data:
Revenues from
continuing
operations............ $ 495,316 $ 489,846 $ 671,171 $ 646,805 $ 597,105 $ 573,498 $ 529,570
Earnings (loss) from
continuing
operations............ 3,939 2,155 6,606 (1,291) (15,849) 2,424 (1,165)
Earnings (loss) from
continuing operations
available for common
shareholders per share
of common stock....... (.15) (.16) (.14) (.27) (.33) .05 (.07)
Balance sheet data:
Total assets-cost
basis................. 2,929,637 2,897,922 2,915,860 2,874,982 2,726,281 2,637,452 2,614,877
Total assets-current
value basis (1)....... -- -- 4,736,961 4,588,636 4,217,819 4,174,093 4,362,153
Debt, capital leases
and redeemable
Preferred stock....... 2,617,637 2,550,453 2,532,920 2,473,596 2,498,983 2,374,527 2,344,095
Shareholders' equity
(deficit):
Historical cost basis.. 54,483 80,763 95,026 113,151 (34,848) 17,328 25,339
Current value basis
(1)................... -- -- 1,614,245 1,525,606 1,188,896 1,274,070 1,470,088
Shareholders' equity
(deficit) per share of
common stock:
Historical cost basis
(2)................... .93 1.42 1.63 1.98 (.74) .36 .53
Current value basis
(1)(2)................ -- -- 27.75 26.75 25.50 26.60 30.10
Other selected data:
Earnings before
depreciation and
deferred taxes from
operations (EBDT)..... 76,978 67,115 94,710 78,281 52,282 46,820 50,290
Net cash provided by
(used in):
Operating activities... 69,525 79,008 113,775 101,149 66,630 67,226 35,057
Investing activities... (64,087) (143,272) (178,551) (154,446) (144,836) (96,210) (248,532)
Financing activities... (28,633) 41,086 40,618 47,068 98,914 17,271 246,968
Ratio of earnings to
fixed charges
(3)(4)(5)............. 1.05 1.04 1.06 1.01 -- -- --
Ratio of earnings to
combined fixed charges
and Preferred stock
dividend requirements
(6)(7)(8)............. -- -- -- -- -- -- --
Consolidated coverage
ratio (9)............. 1.48 1.42 1.44 1.37 1.25 1.24 1.29
Cash dividends per
share of common stock
for the period........ .60 .51 .68 .62 .60 .60 .60
Cash dividends per
share of convertible
Preferred stock for
the period............ 2.43 2.43 3.25 2.83 -- -- --
Market price per share
of common stock at end
of period (10)........ 22.00 19.13 19.25 17.75 18.00 18.25 14.50
Market price per share
of convertible
Preferred stock at end
of period............. 54.88 51.13 48.50 53.75 -- -- --
Weighted average common
shares outstanding.... 47,779 47,563 47,565 47,411 47,994 48,157 48,019
Number of common shares
outstanding at end of
period................ 47,921 47,568 47,571 47,562 47,292 48,193 48,130
Number of convertible
Preferred stock shares
outstanding at end of
period................ 4,505 4,025 4,505 4,025 -- -- --
</TABLE>
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<PAGE>
- --------
(1) Current value basis financial information is not presented for interim
periods.
(2) Historical cost basis shareholders' equity per share of common stock and
current value basis shareholders' equity per share of common stock assume
the conversion of the Company's Series A Convertible Preferred stock.
(3) The pro forma ratios of earnings to fixed charges for the year ended
December 31, 1994 and the nine months ended September 30, 1995, adjusted to
give effect to the issuance of the Preferred Securities and the use of the
proceeds therefrom, are not materially different from the historical
ratios.
(4) The ratio of earnings to fixed charges is computed by dividing fixed
charges into net earnings (loss) before income taxes, extraordinary loss
and cumulative effect of change in accounting principle, adjusted for
minority interest in earnings, amortization of interest costs previously
capitalized and certain other items, plus fixed charges other than
capitalized interest. Fixed charges include interest costs, the estimated
interest component of rent expense and certain other items.
(5) Total fixed charges exceeded the Company's earnings available for fixed
charges by $29,449,000, $10,347,000 and $24,575,000 for the years ended
December 31, 1992, 1991 and 1990, respectively.
(6) The pro forma ratios of earnings to combined fixed charges and Preferred
stock dividend requirements for the year ended December 31, 1994 and the
nine months ended September 30, 1995, adjusted to give effect to the
issuance of the Preferred Securities and the use of the proceeds therefrom,
are not materially different from the historical ratios.
(7) The ratio of earnings to combined fixed charges and Preferred stock
dividend requirements is computed by dividing total fixed charges and
amounts of pre-tax earnings required to cover Preferred stock dividend
requirements into net earnings (loss) before income taxes, extraordinary
loss and cumulative effect of change in accounting principle, adjusted for
minority interest in earnings, amortization of interest costs previously
capitalized and certain other items, plus fixed charges other than
capitalized interest. Fixed charges include interest costs, the estimated
interest component of rent expense and certain other items.
(8) Total fixed charges and Preferred stock dividend requirements exceeded the
Company's earnings available for fixed charges and Preferred stock dividend
requirements by $9,597,000 and $9,752,000 for the nine months ended
September 30, 1995 and 1994, respectively, and $8,934,000, $17,722,000,
$29,449,000, $10,347,000, and $28,363,000 for the years ended December 31,
1994, 1993, 1992, 1991 and 1990, respectively.
(9) Consolidated coverage ratio is the ratio of earnings before depreciation
and deferred taxes from operations (EBDT) plus consolidated interest
expense to consolidated interest expense. Consolidated interest expense
includes dividends on redeemable Preferred Stock (retired for financial
reporting purposes in 1990), which are included because the stock was
subject to mandatory redemption requirements for cash.
(10) The market price of common stock of the Company as of the close of
business on November 17, 1995 was $21.625 per share.
13
<PAGE>
RISK FACTORS
Prospective purchasers of Preferred Securities should carefully review the
information contained elsewhere in this Prospectus and should particularly
consider the following matters:
SUBORDINATION OF GUARANTEE AND JUNIOR SUBORDINATED DEBENTURES; LIMITED
PREFERENCE RIGHTS OF PREFERRED SECURITIES
Rouse's obligations under the Junior Subordinated Debentures are subordinate
and junior in right of payment to all other liabilities of Rouse, except the
Guarantee, trade credit and any liabilities that may be made pari passu with
or subordinate to the Junior Subordinated Debentures expressly by their terms.
Rouse's obligations under the Guarantee are subordinated and junior in right
of payment to all other liabilities of Rouse (including the Junior
Subordinated Debentures) except any liabilities that may be made pari passu
with or subordinate to the Guarantee expressly by their terms. As of September
30, 1995, Rouse had approximately $541 million of Senior Indebtedness
outstanding. As a holding company, substantially all of Rouse's assets consist
of stock and other equity interests of its subsidiaries. Except to the extent
that Rouse may itself be a creditor with recognized claims against Rouse's
subsidiaries, the claims of the holders of the Junior Subordinated Debentures
to assets of the subsidiaries of Rouse effectively are subordinated to the
claims of the direct creditors of the subsidiaries of Rouse. At September 30,
1995, Rouse's subsidiaries had $2,077 million of indebtedness outstanding for
money borrowed and capitalized lease obligations. None of the terms of the
Preferred Securities, the Junior Subordinated Debentures or the Guarantee
limit Rouse's ability to incur additional Senior Indebtedness or subsidiary
indebtedness. See "Description of the Guarantee--Status of the Guarantee" and
"Description of the Junior Subordinated Debentures--Subordination".
The ability of the Issuer to pay amounts due on the Preferred Securities is
solely dependent upon Rouse making payments on the Junior Subordinated
Debentures as and when required.
The holders of the Preferred Securities will have a preference with respect
to cash distributions and amounts payable on liquidation, redemption or
otherwise over the holders of the Common Securities only if there is an Event
of Default. See "Description of the Preferred Securities--Subordination of
Common Securities" and "--Liquidation Distribution Upon Dissolution".
OPTION TO EXTEND INTEREST PAYMENT PERIOD; TAX CONSEQUENCES
Rouse has the right under the Indenture to extend the interest payment
period from time to time on the Junior Subordinated Debentures for a period of
up to 20 consecutive quarters. During any such extended interest payment
period, quarterly distributions on the Preferred Securities would be deferred
(but would continue to accrue with interest thereon) by the Issuer. In the
event that Rouse exercises this right, during such period Rouse may not
declare or pay dividends or distributions (other than dividends or
distributions in common stock of Rouse or other security junior in right of
payment to the Junior Subordinated Debentures) on, or redeem, purchase,
acquire, or make a liquidation payment with respect to any of its capital
stock, or make any guarantee payment with respect to the foregoing (other than
payments under the Guarantee), or repurchase, or cause any of its subsidiaries
to repurchase, any security of Rouse ranking pari passu with or subordinate to
the Junior Subordinated Debentures (except on a ratable basis with securities
ranking pari passu with the Junior Subordinated Debentures). Prior to the
termination of any such extended interest payment period, Rouse may further
extend the interest payment period, provided that such extended interest
payment period together with all such previous and further extensions thereof
may not exceed 20 consecutive quarters and that such extended interest payment
period may not extend beyond the maturity date of the Junior Subordinated
Debentures. Upon the termination of any extended interest payment period and
the payment of all amounts then due, Rouse may select a new extended interest
payment period, subject to the foregoing requirements. If Rouse should
determine to exercise its extension right in the future or the market
perceives that Rouse is likely at any time to exercise such right, the market
price of the
14
<PAGE>
Preferred Securities may be adversely affected. Rouse currently has no
intention to exercise its right to extend interest payment periods on the
Junior Subordinated Debentures. See "Description of the Preferred Securities--
Distributions" and "Description of the Junior Subordinated Debentures--Option
to Extend Interest Payment Period".
Should an extended interest payment period occur, holders of Preferred
Securities will continue to recognize interest income for United States
federal income tax purposes. As a result, such a holder will be required to
include such interest in gross income for United States federal income tax
purposes in advance of the receipt of the deferred cash distributions, and
such holder will not receive such deferred cash distributions from the Issuer
related to such income if such holder disposes of its Preferred Securities
prior to the record date for payment of distributions. See "Certain United
States Federal Income Tax Considerations--Potential Extension of Interest
Payment Period and Original Issue Discount".
RIGHTS UNDER THE GUARANTEE
The Guarantee will be qualified as an indenture under the Trust Indenture
Act of 1939, as amended (the "Trust Indenture Act"). The First National Bank
of Chicago will act as indenture trustee under the Guarantee for the purposes
of compliance with the Trust Indenture Act (the "Guarantee Trustee"). The
Guarantee Trustee will hold the Guarantee for the benefit of the holders of
the Preferred Securities and will also be the trustee for the Junior
Subordinated Debentures and the Property Trustee (as defined under
"Description of the Preferred Securities").
The Guarantee guarantees on a subordinated basis to the holders of the
Preferred Securities the payment (but not the collection) of (i) any accrued
and unpaid distributions required to be paid on the Preferred Securities, if
and only to the extent the Issuer has funds sufficient to make such payment,
(ii) the Redemption Price, including all accrued and unpaid distributions,
with respect to Preferred Securities called for redemption by the Issuer, if
and only to the extent the Issuer has funds sufficient to make such payment
therefor and (iii) upon a voluntary or involuntary dissolution, winding-up or
termination of the Issuer (other than in connection with a redemption of all
of the Preferred Securities), the lesser of (a) the aggregate Liquidation
Amount, to the extent the Issuer has funds sufficient to make such payment and
(b) the amount of assets of the Issuer remaining available for distribution to
holders of the Preferred Securities in liquidation of the Issuer. If, upon a
dissolution, winding-up or termination as described above, the Issuer
distributes the Junior Subordinated Debentures in lieu of making payment on
the Preferred Securities, the Guarantee will cease to be of any effect because
the Guarantee extends only to the Preferred Securities, which will have been
redeemed. The holders of a majority in aggregate Liquidation Amount of the
Preferred Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Guarantee Trustee or
to direct the exercise of any trust or other power conferred upon the
Guarantee Trustee under the Guarantee. Any holder of Preferred Securities may
institute a legal proceeding directly against Rouse to enforce its rights
under the Guarantee without first instituting a legal proceeding against the
Issuer, the Guarantee Trustee or any other person or entity. If Rouse were to
default on its obligations under the Junior Subordinated Debentures, the
Issuer would lack available funds for the payment of distributions or amounts
payable on redemption of the Preferred Securities or otherwise, and in such
event holders of the Preferred Securities would not be able to rely upon the
Guarantee for payment of such amounts. Instead, holders of the Preferred
Securities would be required to rely on the enforcement by the Property
Trustee of its rights, as the registered holder of the Junior Subordinated
Debentures, against Rouse pursuant to the terms of the Junior Subordinated
Debentures and on their rights thereunder. See "Description of the Guarantee--
Status of the Guarantee" and "Description of the Junior Subordinated
Debentures--Subordination". The Trust Agreement provides that each holder of
Preferred Securities by acceptance thereof agrees to the provisions of the
Guarantee and the Indenture.
15
<PAGE>
TAX EVENT
Upon the occurrence of a Tax Event, Rouse has the right to (i) redeem the
Junior Subordinated Debentures, in whole but not in part, in which event the
Issuer will redeem the Preferred Securities, (ii) distribute the Junior
Subordinated Debentures to holders of the Preferred Securities or (iii) cause
the Preferred Securities to remain outstanding and pay Additional Interest
Attributable to Taxes (as defined under "Description of the Junior
Subordinated Debentures -- Additional Interest") on the Junior Subordinated
Debentures. See "Description of the Preferred Securities--Redemption". As a
result, the holders of Preferred Securities upon the occurrence of a Tax
Event, could receive cash equal to the liquidation preference of the Preferred
Securities plus accrued and unpaid distributions thereon to the date of
payment, whether or not earned or declared, or could receive Junior
Subordinated Debentures equal to the liquidation preference of such Preferred
Securities. See "Certain United States Federal Income Tax Consequences--
Receipt of Junior Subordinated Debentures in Liquidation of Rouse Capital" for
a description of the consequences related to the distribution of Junior
Subordinated Debentures.
LIMITED VOTING RIGHTS
Holders of Preferred Securities will have limited voting rights and, except
upon the occurrence of an Event of Default under the Trust Agreement, will not
be entitled to vote to appoint, remove or replace the Property Trustee or the
Administrative Trustees (as defined under "Rouse Capital") or to increase or
decrease the number of Administrative Trustees, which voting rights are vested
exclusively in the holder of the Common Securities unless and until an Event
of Default has occurred and is continuing. If an Event of Default has occurred
and is continuing, the Property Trustee or the Administrative Trustees may be
removed by the holders of a majority in aggregate liquidation amount of the
Preferred Securities. If any proposed amendment to the Trust Agreement
provides for, or the Trustees otherwise propose to effect, (i) any action that
would adversely affect the powers, preferences or special rights of the
holders of the Preferred Securities, whether by way of amendment to the Trust
Agreement or otherwise, or (ii) the dissolution, winding-up or termination of
the Issuer, other than pursuant to the Trust Agreement, then the holders of
outstanding Preferred Securities will be entitled to vote on such amendment or
proposal, and such amendment or proposal shall not be effective except with
the approval of the holders of at least a majority in aggregate Liquidation
Amount of such outstanding Preferred Securities. See "Description of the
Preferred Securities--Voting Rights". In addition, certain modifications may
be made to the Indenture without the consent of the holders of the Preferred
Securities. See "Description of the Junior Subordinated Debentures--
Modification of the Indenture".
TRADING CHARACTERISTICS OF THE PREFERRED SECURITIES
The Preferred Securities have been approved for listing as an equity
security on the New York Stock Exchange, subject to notice of issuance, under
the symbol "RSEPrZ". Accordingly, the Preferred Securities are expected to
trade at a price that takes into account the value, if any, of accrued and
unpaid distributions; thus, purchasers will not pay for and sellers will not
receive any accrued and unpaid interest with respect to their undivided
interests in the Junior Subordinated Debentures owned through the Preferred
Securities that is not included in the trading price of the Preferred
Securities. However, interest on the Junior Subordinated Debentures will be
included in the gross income of holders of Preferred Securities who are United
States Persons (as defined under "Certain United States Federal Income Tax
Considerations--General") as it accrues, rather than when it is paid. See
"Certain United States Federal Income Tax Considerations--Income from
Preferred Securities" and "--Sale of Preferred Securities". Because the
Preferred Securities pay a dividend at a fixed rate based upon the fixed
interest rate payable on the Junior Subordinated Debentures, the trading price
of the Preferred Securities may decline if interest rates rise.
REAL ESTATE INVESTMENT RISKS
GENERAL. Real property investments are subject to varying degrees of risk.
The Company's revenues and the value of its properties may be adversely
affected by the general economic climate,
16
<PAGE>
the local economic climate and local real estate conditions, including the
perceptions of prospective tenants of the attractiveness of the property; the
ability of the Company to provide adequate management, maintenance and
insurance; the inability to collect rent due to bankruptcy or insolvency of
tenants or otherwise; and increased operating costs. Real estate values may
also be adversely affected by such factors as applicable laws, including tax
laws, interest rate levels and the availability of financing.
In particular, the Company's land sales relate primarily to land in and
around Columbia, Maryland. See "The Rouse Company--Land Sales". These sales
are affected by the economic climate in Howard County, Maryland and the
Baltimore-Washington area, and by local real estate conditions and other
factors, including applicable zoning laws and the availability of financing
for residential development.
Similarly, most of the office/industrial buildings that the Company manages
are located in the Baltimore-Washington corridor, including Columbia,
Maryland. See "The Rouse Company--Office, Mixed-Use and Other Properties" and
"--Projects of the Company". Due to the geographic concentration of this
portfolio, the Company's operating results in managing these buildings depend
especially on the local economic climate and real estate conditions, including
the availability of comparable, competing office/industrial buildings.
ILLIQUIDITY OF REAL ESTATE. Real estate investments are relatively illiquid
and therefore may tend to limit the ability of the Company to react promptly
in response to changes in economic or other conditions.
DEVELOPMENT RISKS. New project development is subject to a number of risks,
including risks of availability of financing, construction delays or cost
overruns that may increase project costs, risks that the properties will not
achieve anticipated occupancy levels or sustain anticipated lease levels, and
new project commencement risks such as receipt of zoning, occupancy and other
required governmental permits and authorizations and the incurrence of
development costs in connection with projects that are not pursued to
completion. See "The Rouse Company--Development and Acquisition Activities"
and "--Projects of the Company".
DEPENDENCE ON RENTAL INCOME FROM REAL PROPERTY. The Company's cash flow and
results of operations would be adversely affected if a significant number of
tenants were unable to meet their obligations or if the Company were unable to
lease a significant amount of space in its operating properties on
economically favorable lease terms. In the event of default by a tenant, the
Company may experience delays in enforcing its rights as lessor and may incur
substantial costs in protecting its investment. The bankruptcy or insolvency
of a major tenant may have an adverse effect on an operating property.
COMPETITION. There are numerous other developers, managers and owners of
real estate that compete with the Company in seeking management and leasing
revenues, land for development, properties for acquisition and disposition and
tenants for properties.
UNINSURED LOSS. The Company carries comprehensive liability, fire, extended
coverage and rent loss insurance with respect to its properties with policy
specifications and insured limits customary for similar properties. There are,
however, certain types of losses (generally of a catastrophic nature, such as
wars or earthquakes) which may be either uninsurable or not economically
insurable. Should an uninsured loss occur with respect to a property, the
Company could lose both its invested capital in and anticipated profits from
the property.
ENVIRONMENTAL MATTERS. Under various federal, state and local environmental
laws, ordinances and regulations, a current or previous owner or operator of
real property may become liable for the costs of the investigation, removal
and remediation of hazardous or toxic substances on, under, in or migrating
from such property. Such laws often impose liability without regard to whether
the owner or
17
<PAGE>
operator knew of, or was responsible for, the presence of such hazardous or
toxic substances. The presence of hazardous or toxic substances, or the
failure to remediate properly such substances when present, may adversely
affect the owner's ability to sell or rent such real property or to borrow
using such real property as collateral. Persons who arrange for the disposal
or treatment of hazardous or toxic wastes may also be liable for the costs of
the investigation, removal and remediation of such wastes at the disposal or
treatment facility, regardless of whether such facility is owned or operated
by such person. Other federal, state and local laws, ordinances and
regulations require abatement or removal of certain asbestos-containing
materials in the event of demolition or certain renovations or remodelling,
impose certain worker protection and notification requirements and govern
emissions of and exposure to asbestos fibers in the air. Certain of the
Company's properties contain underground storage tanks which are subject to
strict laws and regulations designed to prevent leakage or other releases of
hazardous substances into the environment. In connection with its ownership,
operation and management of such properties, the Company could be held liable
for the environmental response costs associated with the release of such
regulated substances or related claims. In addition to clean-up actions
brought by federal, state and local agencies, the presence of hazardous
substances on a property could result in personal injury or similar claims by
private plaintiffs. Such claims could result in costs or liabilities which
could exceed the value of such property. Notwithstanding the above, the
Company has not been notified by any private party or governmental authority
of any non-compliance, liability or other claim in connection with
environmental conditions at any of its properties that it believes will
involve any material expenditure, nor is the Company aware of any
environmental condition with respect to any of its properties that it believes
will involve any material expenditure.
COST OF COMPLIANCE WITH AMERICANS WITH DISABILITIES ACT. The Company's
properties are subject to the requirements of the Americans with Disabilities
Act (the "ADA"), which generally requires that public accommodations,
including office buildings, retail centers and hotels be made accessible to
disabled persons. The Company has surveyed each of its properties and believes
that it is in substantial compliance with the ADA and that it will not be
required to make substantial capital expenditures to address the requirements
of the ADA. The Company has developed an ADA Compliance Plan and has budgeted
for and moved forward with the removal of those barriers to access that are
readily achievable. The Company believes that implementation of its ADA
Compliance Plan will not have a material adverse effect on its financial
condition.
ROUSE CAPITAL
Rouse Capital is a statutory business trust formed under Delaware law
pursuant to (i) a trust agreement executed by Rouse, as depositor for the
Issuer, and The First National Bank of Chicago, as property trustee (the
"Property Trustee"), and Michael J. Majchrzak, as Delaware trustee (the
"Delaware Trustee"), and (ii) the filing of a certificate of trust with the
Delaware Secretary of State on September 29, 1995. Such trust agreement will
be amended and restated in its entirety (as so amended and restated, the
"Trust Agreement") substantially in the form filed as an exhibit to the
Registration Statement of which this Prospectus forms a part. The Trust
Agreement will be qualified as an indenture under the Trust Indenture Act. The
Property Trustee will act as sole trustee under the Trust Agreement for the
purposes of compliance with the Trust Indenture Act. The Issuer exists for the
exclusive purposes of (i) issuing the Preferred Securities and Common
Securities representing undivided beneficial interests in the assets of the
Issuer, (ii) purchasing the Junior Subordinated Debentures with the proceeds
from sale of the Common Securities and the Preferred Securities and (iii)
engaging in only those other activities necessary or incidental thereto. All
of the Common Securities are owned by Rouse, and Rouse has agreed in the
Indenture to maintain such ownership. The Common Securities will rank pari
passu, and payments will be made thereon pro rata, with the Preferred
Securities, except that upon the occurrence and continuance of an Event of
Default under the Trust Agreement, the rights of the holders of the Common
Securities to payment in respect of distributions and payments upon
liquidation, redemption and otherwise will be subordinated to the
18
<PAGE>
rights of the holders of the Preferred Securities. Rouse will acquire Common
Securities having an aggregate liquidation amount equal to 3% of the total
capital of the Issuer. The Issuer has a term of approximately 55 years, but
may terminate earlier as provided in the Trust Agreement. The Issuer's
business and affairs will be conducted by the Property Trustee, the Delaware
Trustee and the Administrative Trustees. The holder of the Common Securities,
or the holders of at least a majority in the aggregate Liquidation Amount of
then outstanding Preferred Securities, if an Event of Default has occurred and
is continuing, will be entitled to appoint, remove or replace the Trustees (as
defined under "Description of the Preferred Securities") of the Issuer.
The duties and obligations of the Trustees shall be governed by the Trust
Agreement. Patricia H. Dayton, Jeffrey H. Donahue and George L. Yungmann, all
officers of Rouse, will be appointed as administrative trustees of the Trust
(in such capacity, the "Administrative Trustees") pursuant to the terms of the
Trust Agreement. Under the Trust Agreement, the Administrative Trustees will
have certain duties and powers, including, but not limited to, the delivery of
certain notices to the holders of the Preferred Securities, the appointment of
the Preferred Securities Paying Agent (as defined under "Description of the
Preferred Securities--Redemption Procedures") and the Preferred Securities
Registrar (as defined under "Description of the Preferred Securities--
Registrar and Transfer Agent"), the registering of transfers of the Preferred
Securities and the Common Securities and preparing and filing on behalf of the
Trust all United States federal, state and local tax information and returns
and reports required to be filed by or in respect of the Trust. Under the
Trust Agreement, the Property Trustee will have certain duties and powers,
including, but not limited to, holding legal title to the Junior Subordinated
Debentures on behalf of the Trust, the collection of payments in respect of
the Junior Subordinated Debentures, maintenance of the Payment Account (as
defined in the Trust Agreement), the sending of default notices with respect
to the Preferred Securities and the distribution of the assets of the Trust in
the event of a winding-up of the Trust. See "Description of the Preferred
Securities".
Rouse will pay all fees and expenses related to the Issuer and the offering
of the Preferred Securities.
The principal office of the Issuer is located at 10275 Little Patuxent
Parkway, Columbia, Maryland 21044-3456 and its telephone number is (410) 992-
6000.
THE ROUSE COMPANY
The Rouse Company (the "Company" or "Rouse") is one of the largest publicly-
traded real estate companies in the United States. The Company develops,
acquires, owns and manages income-producing properties across the United
States. The Company also develops and sells land almost exclusively related to
activities in Columbia, Maryland.
OPERATING PROPERTIES
The Company manages a portfolio of operating properties totaling more than
58 million square feet in almost 200 buildings, classified into two business
categories: (i) retail centers and (ii) office, mixed-use and other
properties.
RETAIL CENTERS. Major retail properties owned and managed by the Company
include Willowbrook, Woodbridge Center and Paramus Park in New Jersey and
Faneuil Hall Marketplace, South Street Seaport and Harborplace in the
downtowns of Boston, New York and Baltimore, respectively. The Company manages
75 retail centers totaling 47,218,000 square feet of space and including 153
department stores and 20,925,000 square feet of small store gross leasable
area. Included in the 75 retail centers are eight Columbia village centers
(824,000 sq. ft.) and five centers (636,000 sq. ft. of small shops) that are
parts of large, mixed-use projects. The remaining 62 centers
19
<PAGE>
include 53 regional malls (17,811,000 sq. ft. of mall space) that primarily
are in the suburbs of major metropolitan areas and typically have three or
more department stores attached, and also include nine specialty retail
centers (1,654,000 sq. ft.) that are in the downtowns of major cities and do
not have department stores attached.
The majority of the Company's revenues, Earnings Before Depreciation and
Deferred Taxes ("EBDT") and Current Value Shareholders' Equity is derived from
its retail centers, particularly those where the Company has a significant
ownership interest in the centers. The 62 retail centers (excluding eight
Columbia village centers and five mixed-use projects) include 44 centers where
the Company has ownership interests ranging from 30% to 100%. In the remaining
18 centers, the Company's ownership interest is generally 10% or less, and the
Company normally receives fees for management, leasing and development
activities and an incentive participation in the growth of the centers' cash
flows and values.
OFFICE, MIXED-USE AND OTHER PROPERTIES. The Company manages more than 100
office/industrial buildings totaling approximately 11,353,000 square feet of
gross leasable area. Of this total, 1,842,000 square feet is located in seven
buildings which are part of major mixed-use projects in Phoenix, Baltimore,
Seattle and Portland; 3,056,000 square feet is located in Columbia in projects
that are wholly-owned; 728,000 square feet is located in Owings Mills,
Maryland in four buildings that are jointly-owned; 501,000 square feet is
located at or near retail centers; and the remaining 5,226,000 square feet is
primarily located in the Baltimore-Washington corridor and is part of a joint
venture owned by the Company (5%) and Teachers Insurance and Annuity
Association of America (95%).
The Company owns and manages two hotels, one each in Baltimore and Columbia,
and has an ownership interest in one additional hotel in Baltimore.
LAND SALES
The Company, through its subsidiaries and affiliates, develops and sells
land primarily in and around Columbia, Maryland, which is a new town launched
by the Company in 1962. Today, Columbia has a population of nearly 80,000 and
is home to 2,500 businesses which employ 56,000 people. There are presently
approximately 2,000 acres of net saleable land available for residential,
commercial and industrial uses. Subsidiaries of the Company may develop and
own certain projects in Columbia, primarily retail centers and office
buildings.
DEVELOPMENT AND ACQUISITION ACTIVITIES
The majority of the Company's operating properties were developed by the
Company or its subsidiaries. At the present time, the Company has publicly
announced that it is developing a major new regional shopping center in
Orlando, Florida; is expanding several existing retail centers (Beachwood
Place in Cleveland, Perimeter Mall in Atlanta, Northwest Arkansas Mall in
Fayetteville, Oakwood Center in suburban New Orleans and Burlington Center in
Burlington, New Jersey); has recently acquired interests in Collin Creek Mall
in Plano, Texas and Brandywine Square in Exton, Pennsylvania; has recently
acquired the remaining unowned partnership interests in Santa Monica Place in
Santa Monica, California and Paramus Park in Paramus, New Jersey; and is
investigating additional new retail center development, expansions and
potential acquisitions. Any such new retail center development, expansion or
acquisition will be funded using cash generated from operations, from the
issuance of additional equity securities or from the proceeds of any
additional indebtedness.
20
<PAGE>
PROJECTS OF THE COMPANY
Set forth below is a table that provides information with respect to the
Company's (i) retail centers in operation, (ii) retail centers under
construction, (iii) office projects in operation, (iv) hotel projects in
operation, (v) properties in operation in Columbia, Maryland, (vi) office
projects owned by Rouse-Teachers Properties, Inc. and (vii) industrial
projects owned by Rouse-Teachers Properties, Inc.
<TABLE>
<CAPTION>
RETAIL SQUARE FOOTAGE
---------------------
DATE OF
OPENING OR TOTAL MALL
RETAIL CENTERS IN OPERATION ACQUISITION DEPARTMENT STORES CENTER ONLY
--------------------------- ----------- ----------------- ----------- ---------
<C> <C> <S> <C> <C>
Almeda Mall, Houston, TX (a) 10/68 Foley's; JCPenney 802,000 294,000
The Shops at Arizona Center, 11/90 -- 151,000 151,000
Phoenix, AZ (a)
Augusta Mall, Augusta, GA (b) 8/78 Rich's; R.H. Macy; 902,000 313,000
JCPenney; Sears
Bayside Marketplace, Miami, FL 4/87 -- 223,000 223,000
(b)
Beachwood Place, Cleveland, OH 8/78 Saks Fifth Avenue; 453,000 228,000
(b) Dillard's
Burlington Center, Burlington, NJ 8/82 Strawbridge & 567,000 246,000
(d) Clothier; Sears
Cherry Hill, Cherry Hill, NJ (a) 10/61 Strawbridge & 1,285,000 544,000
Clothier; R.H.
Macy; JCPenney
The Citadel, Colorado Springs, CO 8/80 Mervyn's; JCPenney; 1,097,000 460,000
(d) Foley's; Dillard's
College Square, Cedar Falls, IA 8/80 Von Maur; Younkers; 560,000 313,000
(d) Wal-Mart
Collin Creek Mall, Plano, Texas 9/95 Dillard's; Foley's; 1,123,000 333,000
(b) Sears; JCPenny;
Mervyn's
The Mall in Columbia, Columbia, 8/71 Hecht's; Sears 876,000 421,000
MD (a)
Eastfield Mall, Springfield, MA 4/68 Sears; Filene's; 674,000 217,000
(a) JCPenney
Echelon Mall, Voorhees, NJ (a) 9/70 Strawbridge & 1,065,000 481,000
Clothier; JCPenney;
Boscov's
Exton Square, Exton, PA (a) 3/73 Strawbridge & 443,000 253,000
Clothier
Faneuil Hall Marketplace, Boston, 8/76 -- 215,000 215,000
MA (a)
Fashion Island, Newport Beach, CA 8/90 The Broadway; 1,215,000 593,000
(c) I. Magnin;
Robinson's--May;
Neiman Marcus
</TABLE>
21
<PAGE>
<TABLE>
<CAPTION>
RETAIL SQUARE FOOTAGE
---------------------
DATE OF
OPENING OR TOTAL MALL
RETAIL CENTERS IN OPERATION ACQUISITION DEPARTMENT STORES CENTER ONLY
--------------------------- ----------- ----------------- ----------- ---------
<S> <C> <C> <C> <C>
Franklin Park, Toledo, OH (b) 7/71 Hudson's; JCPenney; 1,082,000 313,000
Jacobson's; Lion
The Gallery at Harborplace, 9/87 -- 139,000 139,000
Baltimore, MD (a)
The Gallery at Market East, 8/77 Strawbridge & 1,320,000 360,000
Philadelphia, PA (a)(c) Clothier; JCPenney
Governor's Square, Tallahassee, 8/79 Burdine's; Sears; 1,031,000 340,000
FL (b) JCPenney; Dillard's
The Grand Avenue, Milwaukee, WI (a) 8/82 Marshall Field; The 842,000 242,000
Boston Store
Greengate Mall, Greensburg, PA 8/65 Lazarus; Montgomery 612,000 233,000
(a) Ward
Harborplace, Baltimore, MD (a) 7/80 -- 136,000 136,000
Harundale Mall, Glen Burnie, MD 10/58 Value City 309,000 232,000
(b)
Highland Mall, Austin, TX (b) 8/71 Dillard's; 1,099,000 367,000
JCPenney; Foley's
Hulen Mall, Ft. Worth, TX (a) 8/77 Foley's; Montgomery 924,000 327,000
Ward; Dillard's
The Jacksonville Landing, 6/87 -- 128,000 128,000
Jacksonville, FL (a)
Mall St. Matthews, St. Matthews, 3/62 JCPenney; Bacon's; 965,000 345,000
KY (a) Dillard's
Marshall Town Center, 8/80 JCPenney; Younkers; 340,000 153,000
Marshalltown, IA (d) Menard's
Midtown Square, Charlotte, NC (a) 10/59 Burlington Coat 235,000 190,000
Factory
Mondawmin (a)/Metro Plaza (b), 1/78; -- 496,000 496,000
Baltimore, MD 12/82
Muscatine Mall, Muscatine, IA (d) 8/80 JCPenney; Von Maur; 347,000 186,000
Wal-Mart
The Shops at National Place, 5/84 -- 125,000 125,000
Washington, D.C. (a)
North Grand, Ames, IA (d) 8/80 JCPenney; Sears; 350,000 157,000
Younkers
North Star, San Antonio, TX (b) 9/60 Dillard's; Foley's; 1,288,000 487,000
Saks Fifth Avenue;
Marshall Field;
Mervyn's
Northwest Arkansas Mall, 8/80 JCPenney; Sears; 554,000 242,000
Fayetteville, AR (d) Dillard's
Northwest Mall, Houston, TX (a) 10/68 Foley's; JCPenney 800,000 292,000
</TABLE>
22
<PAGE>
<TABLE>
<CAPTION>
RETAIL SQUARE FOOTAGE
---------------------
DATE OF
OPENING OR TOTAL MALL
RETAIL CENTERS IN OPERATION ACQUISITION DEPARTMENT STORES CENTER ONLY
--------------------------- ----------- ----------------- ----------- ---------
<S> <C> <C> <C> <C>
Oakwood Center, Gretna, LA (a) 10/82 Sears; Dillard's; 960,000 362,000
Mervyn's; Maison
Blanche
Outlet Square, Atlanta, GA (a) 7/83 Burlington Coat 326,000 183,000
Factory; Marshalls
Owings Mills, Baltimore County, 7/86 R.H. Macy; Hecht's; 809,000 325,000
MD (a) Saks Fifth Avenue
Paramus Park, Paramus, NJ (a) 3/74 Abraham & Straus; 755,000 279,000
Sears
Perimeter Mall, Atlanta, GA (b) 8/71 Rich's; JCPenney; 1,224,000 444,000
R.H. Macy
Pioneer Place, Portland, OR (a) 3/90 Saks Fifth Avenue 220,000 160,000
Plymouth Meeting, Montgomery 2/66 Strawbridge & 784,000 442,000
County, PA (a) Clothier; Hess
Randhurst, Mt. Prospect, IL (d) 7/81 Carson, Pirie, 1,324,000 591,000
Scott; JCPenney;
Montgomery Ward;
Kohls
Ridgedale Center, Minnetonka, MN (d) 1/89 Carson, Pirie, 1,039,000 334,000
Scott; Dayton's; JC
Penney; Sears
Riverwalk, New Orleans, LA (a) 8/86 -- 179,000 179,000
St. Louis Union Station, 8/85 -- 172,000 172,000
St. Louis, MO (a)
Salem Centre, Salem, OR (d) 6/90 Meier & Frank; 649,000 211,000
JCPenney; Mervyn's;
Nordstrom
Salem Mall, Dayton, OH (a) 10/66 Lazarus; Sears; 817,000 312,000
JCPenney
Santa Monica Place, Santa 10/80 The Broadway; 570,000 287,000
Monica, CA (a) Robinson's--May
Sherway Gardens, Toronto, ONT (c) 12/78 Eaton's; The Bay 968,000 474,000
South DeKalb, Decatur, GA (a) 7/78 Rich's; JCPenney 691,000 329,000
Southland, Taylor, MI (d) 1/89 Hudson's; Mervyn's; 903,000 320,000
JCPenney
South Street Seaport, New York, 7/83 -- 257,000 257,000
NY (a)
Staten Island Mall, Staten 11/80 Sears; R.H. Macy; 1,224,000 618,000
Island, NY (d) JCPenney
Mall St. Vincent, Shreveport, LA 8/80 Sears; Dillard's 557,000 200,000
(c)
Talbottown, Easton, MD (a) 3/57 JCPenney 90,000 71,000
Tampa Bay Center, Tampa, FL (b) 8/76 Burdine's; Sears; 883,000 325,000
Montgomery Ward
</TABLE>
23
<PAGE>
<TABLE>
<CAPTION>
RETAIL SQUARE FOOTAGE
---------------------
DATE OF
OPENING OR TOTAL MALL
RETAIL CENTERS IN OPERATION ACQUISITION DEPARTMENT STORES CENTER ONLY
--------------------------- ----------- ----------------- ---------- ----------
<S> <C> <C> <C> <C>
Town and Country Center, 2/88 Sears; Marshalls; 645,000 467,000
Miami, FL (c) Mervyn's
Underground Atlanta, Atlanta, GA 6/89 -- 219,000 219,000
(c)
Village of Cross Keys, 9/65 -- 68,000 68,000
Baltimore, MD (a)
Westlake Center, Seattle, WA (b) 10/88 Nordstrom; Bon 723,000 118,000
Marche
Westland Mall, West 8/80 JCPenney; Younkers 344,000 175,000
Burlington, IA (d)
White Marsh, Baltimore 8/81 R.H. Macy; Sears; 1,178,000 359,000
County, MD (a) JCPenney; Hecht's
Willowbrook, Wayne, NJ (b) 9/69 R.H. Macy; Sears; 1,499,000 485,000
Steinbach's;
Stern's
Woodbridge Center, 3/71 JCPenney; Sears; 1,544,000 560,000
Woodbridge, NJ (a) Stern's; ---------- ----------
Steinbach's;
Fortunoff
Total Retail 46,394,000 20,101,000
Centers in ---------- ----------
Operation
</TABLE>
<TABLE>
<CAPTION>
RETAIL SQUARE FOOTAGE
---------------------
RETAIL CENTERS UNDER
CONSTRUCTION OR IN TOTAL MALL
DEVELOPMENT DEPARTMENT STORES CENTER ONLY
-------------------- ----------------- ----------- ---------
<S> <C> <C> <C>
Brandywine Square, -- 565,000 565,000
Exton, PA
Beachwood Place Expansion, Nordstrom 459,000 90,000
Cleveland, OH
Northwest Arkansas Mall JCPenney; Dillard's 310,000 70,000
Expansion, Fayetteville, AR
Oakwood Center Expansion, JCPenney 125,000 --
Gretna, LA
Burlington Center Expansion, JCPenney 102,000 --
Burlington, NJ ----------- ---------
Total Retail Centers Under 1,561,000 725,000
Construction or in ----------- ---------
Development
</TABLE>
24
<PAGE>
<TABLE>
<CAPTION>
OFFICE PROJECTS IN OPERATION LOCATION SQUARE FEET
---------------------------- -------- -----------
<S> <C> <C>
300 East Lombard (c) Baltimore, MD 233,000
Quadrangle at Cross Keys (a) Baltimore, MD 106,000
Village Square at Cross Keys (a) Baltimore, MD 79,000
Legg Mason Tower (a) Baltimore, MD 265,000
Schilling Center (a) Hunt Valley, MD 55,000
Alexander & Alexander Building (b) Owings Mills, MD 143,000
Alexander & Alexander Building II (b) Owings Mills, MD 198,000
Blue Cross & Blue Shield Building I (b) Owings Mills, MD 270,000
Blue Cross & Blue Shield Building II (b) Owings Mills, MD 117,000
One Arizona Center (a) Phoenix, AZ 322,000
Two Arizona Center (a) Phoenix, AZ 444,000
First National Bank Plaza (a) Mt. Prospect, IL 66,000
Faneuil Hall Marketplace (a) Boston, MA 147,000
Pioneer Place (a) Portland, OR 284,000
Westlake Center (b) Seattle, WA 342,000
---------
Total Office
Projects in Operation 3,071,000
---------
<CAPTION>
HOTEL PROJECTS IN OPERATION LOCATION ROOMS
--------------------------- -------- -----------
<S> <C> <C>
Cross Keys Inn (a) Baltimore, MD 148
Stouffer Harborplace Hotel Baltimore, MD 622
<CAPTION>
COLUMBIA PROPERTIES IN OPERATION TYPE OF PROJECT SQUARE FEET
-------------------------------- --------------- -----------
<S> <C> <C>
The Mall in Columbia*(a) Retail 876,000
Dobbin Center (b) Community Retail 219,000
Dorsey's Search Village Center (a) Community Retail 86,000
Harper's Choice Village Center (a) Community Retail 81,000
Hickory Ridge Village Center (a) Community Retail 97,000
King's Contrivance Village Center (a) Community Retail 107,000
Long Reach Village Center (a) Community Retail 77,000
Oakland Mills Village Center (a) Community Retail 62,000
Wilde Lake Village Center (a) Community Retail 95,000
10 Corporate Center (a) Office 89,000
Amdahl Building (a) Office 105,000
American City Building (a) Office 111,000
Columbia Center Building (a) Office 44,000
Dorsey's Search Office Building (a) Office 20,000
Exhibit Building (a) Office 20,000
PaineWebber Building (a) Office 134,000
Parkside (a) Office 112,000
RWD Building (a) Office 137,000
Re/Max Building (a) Office 39,000
Reliance Building (a) Office 38,000
The Ryland Group Headquarters (a) Office 167,000
Oakland Building (a) R&D/Industrial 145,000
Gateway Commerce Center 1, 2 & 20 (a) Industrial 1,895,000
Columbia Inn (a) Hotel 289 rooms
---------
Total Columbia
Properties in Operation 4,756,000
---------
</TABLE>
25
<PAGE>
- --------
* Also listed in previous table of Retail Centers in Operation
(a) Projects are wholly-owned by subsidiaries of the Company.
(b) Projects are owned by joint ventures or partnerships and are managed by
subsidiaries of the Company for a fee. The Company's ownership interest,
through its subsidiaries, is at least 50% (except for North Star and
Willowbrook in which the Company has 37 1/2% interests and Collin Creek
Mall in which the Company has a 30% interest).
(c) Projects are managed by subsidiaries of the Company for a fee plus a share
of cash flow.
(d) Projects are owned by partnerships or wholly owned (Staten Island Mall,
Randhurst and Burlington Center) by subsidiaries of the Company and are
managed by subsidiaries of the Company for a fee plus a share of cash flow
and a share of proceeds from sales or refinancings. The Company's
ownership interest in the partnerships is determined based upon the
results of operations.
<TABLE>
<CAPTION>
OFFICE PROJECTS OWNED BY ROUSE-
TEACHERS PROPERTIES, INC. LOCATION SQUARE FEET
------------------------------- -------- -----------
<C> <S> <C>
Triangle Business Center Baltimore, MD 75,000
Owen Brown I Columbia, MD 46,000
Sieling Tech Center Columbia, MD 76,000
RiversPark I & II Columbia, MD 306,000
Center Pointe Hunt Valley, MD 130,000
201 International Circle Hunt Valley, MD 79,000
Loveton Center 9 Hunt Valley, MD 53,000
11011 McCormick Road Hunt Valley, MD 57,000
Schilling Plaza North Hunt Valley, MD 96,000
Schilling Plaza South Hunt Valley, MD 108,000
One Hunt Valley Hunt Valley, MD 225,000
Prince George's County,
Inglewood Office Centres 1, 2 MD 222,000
Prince George's County,
Inglewood Tech Centers I, II, III, IV & V MD 316,000
Silver Spring Metro Plaza Silver Spring, MD 692,000
Ambassador Center Woodlawn, MD 83,000
15--17 Governor's Court Woodlawn, MD 29,000
21 Governor's Court Woodlawn, MD 56,000
Parkview Center Woodlawn, MD 58,000
Harbourside Tampa, FL 147,000
One & Two Prestige Place Tampa, FL 144,000
McCormick Center I, II & III Tampa, FL 202,000
Gateway Centers I & II Raleigh, NC 116,000
Senate Plaza Camp Hill, PA 231,000
---------
Total Office Projects
Owned by Rouse-Teachers
Properties, Inc. 3,547,000
---------
<CAPTION>
INDUSTRIAL PROJECTS OWNED BY ROUSE-
TEACHERS PROPERTIES, INC. LOCATION SQUARE FEET
----------------------------------- -------- -----------
<C> <S> <C>
Pulaski Industrial Park Essex, MD 157,000
Hunt Valley Business Community Hunt Valley, MD 950,000
Rutherford Business Center Woodlawn, MD 572,000
---------
Total Industrial
Projects
Owned by Rouse-Teachers
Properties, Inc. 1,679,000
---------
</TABLE>
26
<PAGE>
The principal executive office of the Company is located at 10275 Little
Patuxent Parkway, Columbia, Maryland 21044-3456 and its telephone number is
(410) 992-6000.
USE OF PROCEEDS
The proceeds from the sale of the Preferred Securities and the Common
Securities will be invested in the Junior Subordinated Debentures issued
pursuant to the Indenture. The net proceeds to be received by the Company from
the sale of the Junior Subordinated Debentures are estimated to be
approximately $ ($ , assuming exercise of the over-allotment option).
Approximately $99 million of the net proceeds will be used primarily to retire
or reduce outstanding Company debt, debt carrying a Company guarantee of
repayment and higher rate nonrecourse property debt. The Company currently has
identified approximately $95 million in debt having fixed interest rates
ranging from 9.25% to 10.25% and maturities ranging from five months to 20
years and approximately $40 million in debt having variable interest rates
averaging 8.0% and maturities ranging from 3 years to 5 years which may be
reduced or retired with the net proceeds. The specific debt that will be
reduced or retired will be determined based on the best economic interests of
the Company. The Company intends to use most of the net proceeds remaining
after debt retirement or reduction to fund development projects and/or
property acquisitions. The specific development projects and property
acquisitions will be determined based on the best economic interests of the
Company. The remaining net proceeds will be used for general corporate
purposes. Prior to such uses, the net proceeds will be invested in high-
quality, short-term instruments.
CAPITALIZATION
The following table sets forth the consolidated capitalization of the
Company and its subsidiaries at September 30, 1995 and as adjusted to give
effect to (i) the sale of the Preferred Securities offered hereby (without
deduction of Underwriters' Compensation or expenses and assuming the over-
allotment option is not exercised) and (ii) the application of the proceeds
therefrom.
<TABLE>
<CAPTION>
SEPTEMBER 30, 1995
(IN THOUSANDS)
----------------------
ACTUAL ADJUSTED
------ ----------
<S> <C> <C>
Current portion of debt and capital lease obligations.. $ 123,371 $ 114,951
========== ==========
Long-term debt......................................... $2,438,271 $2,347,698
Long-term portion of capital lease obligations......... 55,995 55,995
Company-obligated mandatorily redeemable preferred se-
curities of subsidiary Trust holding solely Company
Subordinated Debt Securities (1)...................... -- 125,000
Shareholders' equity:
Preferred stock, par value $.01 per share; 50,000,000
shares authorized; 4,505,009 shares of Series A Con-
vertible Preferred stock, par value $.01 per share,
issued and outstanding................................ 45 45
Common stock, par value $.01 per share; 250,000,000
shares authorized; 47,921,499 shares issued and out-
standing.............................................. 479 479
Additional paid-in capital............................. 309,231 309,231
Accumulated deficit.................................... (255,272) (255,272)
---------- ----------
Total shareholders' equity........................... 54,483 54,483
---------- ----------
Total capitalization................................. $2,548,749 $2,583,176
========== ==========
</TABLE>
- --------
(1) As described herein, the assets of the Issuer include $125 million
aggregate principal amount of % Junior Subordinated Debentures of Rouse
which will constitute approximately 97% of the total assets of the Issuer.
The remaining 3% of the assets of the Issuer will be comprised of
approximately $3.9 million aggregate principal amount of % Junior
Subordinated Debentures of Rouse purchased with the proceeds of the sale
of Common Securities of the Issuer.
27
<PAGE>
SELECTED FINANCIAL DATA OF ROUSE
The following selected financial information of the Company for the years
ended December 31, 1994, 1993 and 1992 and the nine months ended September 30,
1995 and 1994 was derived from the Company's consolidated financial statements
and five-year comparison of selected financial data contained in its Annual
Report on Form 10-K for the year ended December 31, 1994 and its Quarterly
Reports on Form 10-Q for the quarters ended September 30, 1995 and 1994 and is
qualified in its entirety by such documents. See "Incorporation of Certain
Documents by Reference". The selected financial information of the Company for
the years ended December 31, 1992, 1991 and 1990 was derived from the audited
consolidated financial statements of the Company for such periods and the
balance sheet information for the quarter ended September 30, 1994 was derived
from the unaudited consolidated financial statements of the Company for such
period which, in each case, have not been incorporated herein by reference.
Results for the nine months ended September 30, 1995 and 1994 are unaudited.
Results for the nine months ended September 30, 1995 are not necessarily
indicative of results for the year ending December 31, 1995. The following
financial information should be read in conjunction with the Company's
consolidated financial statements and notes thereto incorporated by reference
into and "Management's Discussion and Analysis of Financial Condition and
Results of Operations" included elsewhere in this Prospectus.
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
---------------------- ----------------------------------------------------------
1995 1994 1994 1993 1992 1991 1990
---------- ---------- ---------- ---------- ---------- ---------- ----------
(IN THOUSANDS, EXCEPT RATIOS AND PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
Operating results data:
Revenues from
continuing
operations............ $ 495,316 $ 489,846 $ 671,171 $ 646,805 $ 597,105 $ 573,498 $ 529,570
Earnings (loss) from
continuing
operations............ 3,939 2,155 6,606 (1,291) (15,849) 2,424 (1,165)
Earnings (loss) from
continuing operations
available for common
shareholders per share
of common stock....... (.15) (.16) (.14) (.27) (.33) .05 (.07)
Balance sheet data:
Total assets-cost ba-
sis................... 2,929,637 2,897,922 2,915,860 2,874,982 2,726,281 2,637,452 2,614,877
Total assets-current
value basis (1)....... -- -- 4,736,961 4,588,636 4,217,819 4,174,093 4,362,153
Debt, capital leases
and redeemable
Preferred stock....... 2,617,637 2,550,453 2,532,920 2,473,596 2,498,983 2,374,527 2,344,095
Shareholders' equity
(deficit):
Historical cost basis.. 54,483 80,763 95,026 113,151 (34,848) 17,328 25,339
Current value basis
(1)................... -- -- 1,614,245 1,525,606 1,188,896 1,274,070 1,470,088
Shareholders' equity
(deficit) per share of
common stock:
Historical cost basis
(2)................... .93 1.42 1.63 1.98 (.74) .36 .53
Current value basis
(1)(2)................ -- -- 27.75 26.75 25.50 26.60 30.10
Other selected data:
Earnings before
depreciation and
deferred taxes from
operations (EBDT)..... 76,978 67,115 94,710 78,281 52,282 46,820 50,290
Net cash provided by
(used in):
Operating activities... 69,525 79,008 113,775 101,149 66,630 67,226 35,057
Investing activities... (64,087) (143,272) (178,551) (154,446) (144,836) (96,210) (248,532)
Financing activities... (28,633) 41,086 40,618 47,068 98,914 17,271 246,968
Ratio of earnings to
fixed
charges (3)(4)(5)..... 1.05 1.04 1.06 1.01 -- -- --
Ratio of earnings to
combined fixed charges
and Preferred stock
dividend requirements
(6)(7)(8)............. -- -- -- -- -- -- --
Consolidated coverage
ratio (9)............. 1.48 1.42 1.44 1.37 1.25 1.24 1.29
Cash dividends per
share of common stock
for the period........ .60 .51 .68 .62 .60 .60 .60
Cash dividends per
share of convertible
Preferred stock for
the period............ 2.43 2.43 3.25 2.83 -- -- --
Market price per share
of common stock at end
of period (10)........ 22.00 19.13 19.25 17.75 18.00 18.25 14.50
Market price per share
of convertible
Preferred stock at end
of period............. 54.88 51.13 48.50 53.75 -- -- --
Weighted average common
shares outstanding.... 47,779 47,563 47,565 47,411 47,994 48,157 48,019
Number of common shares
outstanding at end of
period................ 47,921 47,568 47,571 47,562 47,292 48,193 48,130
Number of convertible
Preferred stock shares
outstanding at end of
period................ 4,505 4,025 4,505 4,025 -- -- --
</TABLE>
28
<PAGE>
- --------
(1) Current value basis financial information is not presented for interim
periods.
(2) Historical cost basis shareholders' equity per share of common stock and
current value basis shareholders' equity per share of common stock assume
the conversion of the Company's Series A Convertible Preferred stock.
(3) The pro forma ratios of earnings to fixed charges for the year ended
December 31, 1994 and the nine months ended September 30, 1995, adjusted
to give effect to the issuance of the Preferred Securities and the use of
the proceeds therefrom, are not materially different from the historical
ratios.
(4) The ratio of earnings to fixed charges is computed by dividing fixed
charges into net earnings (loss) before income taxes, extraordinary loss
and cumulative effect of change in accounting principle, adjusted for
minority interest in earnings, amortization of interest costs previously
capitalized and certain other items, plus fixed charges other than
capitalized interest. Fixed charges include interest costs, the estimated
interest component of rent expense and certain other items.
(5) Total fixed charges exceeded the Company's earnings available for fixed
charges by $29,449,000, $10,347,000 and $24,575,000 for the years ended
December 31, 1992, 1991 and 1990, respectively.
(6) The pro forma ratios of earnings to combined fixed charges and Preferred
stock dividend requirements for the year ended December 31, 1994 and the
nine months ended September 30, 1995, adjusted to give effect to the
issuance of the Preferred Securities and the use of the proceeds
therefrom, are not materially different from the historical ratios.
(7) The ratio of earnings to combined fixed charges and Preferred stock
dividend requirements is computed by dividing total fixed charges and
amounts of pre-tax earnings required to cover Preferred stock dividend
requirements into net earnings (loss) before income taxes, extraordinary
loss and cumulative effect of change in accounting principle, adjusted for
minority interest in earnings, amortization of interest costs previously
capitalized and certain other items, plus fixed charges other than
capitalized interest. Fixed charges include interest costs, the estimated
interest component of rent expense and certain other items.
(8) Total fixed charges and Preferred stock dividend requirements exceeded the
Company's earnings available for fixed charges and Preferred stock
dividend requirements by $9,597,000 and $9,752,000 for the nine months
ended September 30, 1995 and 1994, respectively, and $8,934,000,
$17,722,000, $29,449,000, $10,347,000, and $28,363,000 for the years ended
December 31, 1994, 1993, 1992, 1991 and 1990, respectively.
(9) Consolidated coverage ratio is the ratio of earnings before depreciation
and deferred taxes from operations (EBDT) plus consolidated interest
expense to consolidated interest expense. Consolidated interest expense
includes dividends on redeemable Preferred Stock (retired for financial
reporting purposes in 1990), which are included because the stock was
subject to mandatory redemption requirements for cash.
(10) The market price of common stock of the Company as of the close of
business on November 17, 1995 was $21.625 per share.
29
<PAGE>
RECENT DEVELOPMENTS
The Company and certain of its affiliates have been defendants in a lawsuit
brought in Louisiana state court in 1990. The plaintiff, Robert P. Guastella
Equities, Inc., a former tenant at Riverwalk, a retail center in New Orleans,
Louisiana, which is owned and operated by an affiliate of the Company, alleged
in the lawsuit that the defendants breached plaintiff's lease for the
operation of a restaurant at Riverwalk. In 1993, a jury returned a verdict
against the defendants upon which judgment was entered by the trial court on
January 7, 1994, in the total net amount of approximately $9,128,000 plus
interest from the date the suit was filed. The trial court also entered an
amended judgment in which it awarded the plaintiff $450,000 in attorneys'
fees.
On May 23, 1994, the Company appealed this judgment to the Louisiana Court
of Appeals, Fourth Circuit. On November 16, 1995, the Louisiana Court of
Appeals denied the Company's appeal in a 2 to 1 decision and left standing the
judgment, but reduced the judgment by $240,000. The Company believes that the
verdict and judgment are contrary to the facts and applicable law. The Company
intends to file a motion for reconsideration with the Louisiana Court of
Appeals and, if that motion is denied, intends to petition the Louisiana
Supreme Court to hear the appeal.
However, the Company has determined that it will record in the fourth
quarter of 1995 a pre-tax provision in the amount of $12,316,000, representing
the full amount of the modified award (including attorneys' fees) plus
interest, less pre-tax provisions previously recorded totaling $1,150,000. The
Company expects that the provision will cause a net loss for the fourth
quarter and for the full year 1995. The Company believes that the ultimate
disposition of this matter will not have a material adverse effect on the
Company's consolidated financial position or liquidity. The Company also
believes that the ultimate disposition of this matter will not have a material
adverse effect on either the Company's or the Issuer's ability to satisfy its
obligations under the Preferred Securities.
30
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERAL
The Company's primary business is the acquisition, development and
management of income-producing real estate projects. The Company operates a
diversified portfolio of real estate properties located across the United
States. In addition, the Company develops and sells land, primarily in
Columbia, Maryland.
Management believes that the Company's financial position is sound and that
its liquidity and capital resources are adequate. The Company has continued to
achieve strong financial results in recent periods, despite the generally
difficult market conditions in the real estate and retailing industries. These
results have been made possible by several factors, including the continued
strong performance of the Company's larger, major market retail centers and
Columbia land sales operations, refinancing of a significant amount of
project-related debt at lower interest rates, particularly in 1993 and the
first half of 1994, and, to a lesser extent, dispositions or modifications of
the terms of agreements relating to properties which were performing below
expectations.
YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
OPERATING RESULTS
This discussion and analysis of operating results covers each of the
Company's four business segments as management believes that a segment
analysis provides the most effective means of understanding the Company's
business. Note 11 to the consolidated financial statements for the years ended
December 31, 1994, 1993 and 1992 incorporated by reference into this
Prospectus should be referred to when reading this discussion.
OPERATING PROPERTIES. The Company reports the results of its operating
properties in two categories: retail centers ("retail" properties) and office,
mixed-use and other properties ("office/mixed-use" properties).
The Company's tenant leases provide the foundation for the performance of
its retail and office/mixed-use properties. In addition to minimum rents, the
majority of retail and office tenant leases provide for other rents which
reimburse the Company for most of its operating expenses. Substantially all of
the Company's retail leases also provide for additional rent based on tenant
sales (percentage rent) in excess of stated levels. As leases expire, space is
re-leased, minimum rents are generally adjusted to market rates, expense
reimbursement provisions are updated and new percentage rent levels are
established for retail leases.
Most of the Company's operating properties are financed with long-term,
fixed rate, nonrecourse debt and, therefore, are not directly affected by
changes in interest rates. Although the interest rates on this debt do not
fluctuate, certain loans provide for additional payments to the Company's
lenders based on operating results and, in some instances, a share of a
property's residual value upon sale or refinancing. Certain lenders' rights to
participation in residual value expire upon maturity of the related loans.
Revenues from retail properties increased $22,877,000 in 1994 and
$35,118,000 in 1993. The increase in 1994 was attributable to expansions
opened in 1994, a full year of operations of expansions opened and properties
acquired in 1993 and increases in effective rents due to re-leasing efforts.
The increase was also due to higher occupancy levels at the Company's larger,
major market retail centers and increased lease cancellation payments received
as a result of tenant restructuring or downsizing. These increases were
partially offset by the disposition of a retail center in the first quarter of
1994.
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<PAGE>
A substantial portion of the increase in 1993 was attributable to changes in
the composition of the Company's portfolio of retail properties during the
year, including acquisitions of interests in retail centers in the first and
second quarters and the openings of expansions in the first and third
quarters, and to a full year of operations for properties opened or acquired
during 1992. The increase in revenues also reflects higher average occupancy
levels, increased rents from temporary and seasonal tenants, re-leasing of
space at higher effective rents and improved recoveries of operating expenses
from tenants at certain properties.
Total operating and interest expenses for retail properties increased by
$8,965,000 in 1994 and $19,959,000 in 1993, including increased depreciation
and amortization of $2,662,000 and $1,508,000, respectively. The increase in
1994 was attributable to costs relating to expansions opened in 1994 and a
full year of operations of expansions opened and properties acquired in 1993,
higher occupancy levels at many of the Company's larger, major market retail
centers and higher interest costs related to floating rate debt. These
increases were partially mitigated by the effects of the disposition of a
retail center in the first quarter of 1994 and lower effective interest
expense on fixed rate property debt due to debt repayments and refinancing at
certain properties. The increase in 1993 was attributable primarily to the
changes in the Company's portfolio of retail properties described above,
partially offset by reductions in interest expense due to debt reductions,
lower interest rates on floating rate debt and refinancing at certain
properties.
Revenues from office/mixed-use properties increased $2,540,000 in 1994 and
$7,395,000 in 1993. Total operating and interest expenses for office/mixed-use
properties increased $1,835,000 in 1994 and $3,490,000 in 1993, including
increased depreciation and amortization of $1,324,000 and $529,000,
respectively. The increase in revenues in 1994 was attributable primarily to
higher occupancy levels at office and hotel properties and a full year of
operations of properties opened in 1993, partially offset by lower recoveries
of operating expenses at two office properties where the tenants began paying
certain operating expenses directly in 1994. The increase in expenses in 1994
was due principally to a full year of operations of properties opened in 1993
and higher occupancy levels at office and hotel properties, partially offset
by lower operating expenses at the two office properties referred to above.
Also, lower interest expense at certain properties due to debt reductions,
refinancing and the exercise, in the second quarter of 1994, of an option in a
loan agreement to reduce the effective interest rate on that loan, partially
mitigated the overall increase in interest and operating expenses in 1994.
The increases in revenues and expenses in 1993 were due principally to
operations of two industrial buildings in Columbia which opened in 1993 and an
office building in Columbia opened in 1992. The increase in expenses in 1993
was partially offset by a reduction in interest expense due to debt
reductions, lower interest rates on floating rate debt and the expiration of
certain interest rate exchange agreements.
LAND SALES. The Company's land sales operations relate primarily to the city
of Columbia. Generally, revenues and operating income from land sales are
affected by such factors as the availability to purchasers of construction and
permanent mortgage financing at acceptable interest rates, consumer and
business confidence, availability of saleable land for particular uses and
management's decisions to sell, develop or retain land.
Land sales revenues were $35,232,000 in 1994, $35,313,000 in 1993 and
$29,137,000 in 1992. The increase in revenues in 1993 were attributable
primarily to higher sales of land for residential uses, and to a lesser
extent, commercial land for retail and other uses.
Land sales costs and expenses were $24,905,000 in 1994, $23,480,000 in 1993
and $19,289,000 in 1992. The increases in costs and expenses in 1994 and 1993
were attributable primarily to higher operating and interest expenses due to
lower levels of land development activity on projects other than Columbia. The
increase in 1993 was also due to increased cost of sales due to higher sales
revenues.
32
<PAGE>
DEVELOPMENT. Development expenses were $6,989,000 in 1994, $4,348,000 in
1993 and $4,916,000 in 1992. These costs consist primarily of additions to the
pre-construction reserve and new business costs.
The pre-construction reserve is maintained to provide for costs of projects
in the pre-construction phase of development, including retail center
renovation and expansion opportunities, which may not go forward to
completion. Additions to the pre-construction reserve were $3,400,000 in 1994,
$2,900,000 in 1993 and $3,050,000 in 1992. New business costs relate primarily
to the initial evaluation of acquisition and development opportunities. New
business costs were $3,094,000 in 1994, $953,000 in 1993 and $1,371,000 in
1992. The increases in these costs in 1994 are due to the Company's more
aggressive pursuit of new development and acquisition opportunities.
CORPORATE. Corporate revenues consist of interest income earned on temporary
investments, including investments of unused proceeds from refinancing of
certain properties. Corporate interest expense relates primarily to interest
on the convertible subordinated debentures, unused proceeds from refinancing
of certain properties and a portion of the unsecured 8.5% notes, net of
capitalized interest on corporate funds temporarily invested in projects under
development. Corporate expenses also include general and administrative costs.
Corporate interest income was $2,892,000 in 1994, $3,862,000 in 1993 and
$2,851,000 in 1992. The decrease in 1994 was attributable primarily to lower
average investment balances. The increase in 1993 was attributable to higher
average investment balances as a result of proceeds from the offerings of the
8.5% unsecured notes and Preferred stock and refinancing of certain retail
properties in 1992. The Company earned higher interest rates in 1994 and lower
interest rates in 1993 on its investment balances which consisted primarily of
short-term U.S. government and agency obligations in both years.
Corporate interest costs were $13,934,000 in 1994, $18,571,000 in 1993 and
$20,396,000 in 1992. Of such amounts, $2,564,000, $2,158,000 and $1,984,000
were capitalized in 1994, 1993 and 1992, respectively, on funds invested in
development projects. The decreases in corporate interest costs in 1994 and
1993 are attributable primarily to the redemption of a $100,000,000 issue of
convertible subordinated debentures in May 1993. The decrease in 1993 was
partially offset by the issuance of the 8.5% unsecured notes. A portion of the
proceeds of the 8.5% unsecured notes and proceeds from refinancing of certain
retail properties completed in 1992 were used to refinance certain land and
operating property debt and to finance improvements to a number of operating
properties during 1994 and 1993. The interest costs on loan proceeds used for
other segments are included in the operating results of those segments,
reducing corporate interest costs. The higher level of interest capitalized in
1994, when compared to 1993 and 1992, reflects higher levels of corporate
funds invested in development projects consistent with the Company's more
aggressive pursuit of development opportunities in 1994.
GAIN (LOSS) ON DISPOSITIONS OF ASSETS AND OTHER PROVISIONS, NET. The loss on
dispositions of assets and other provisions, net, for 1994 consists primarily
of losses totaling $8,045,000 incurred on dispositions of the Company's
interests in two retail centers, a hotel and an office building and a
provision for loss of $2,212,000 (recorded in the fourth quarter) on an
investment in an industrial building which is subject to a contract for sale.
These losses were partially offset by a gain of $2,761,000 related to the
disposition of an interest in a retail center the Company continues to manage.
The loss on dispositions of assets and other provisions, net, for 1993
consists primarily of a provision for loss on investment in a retail center
recorded in the fourth quarter. This loss was recognized based on management's
determination that the Company would not continue to support the property
(which is financed by nonrecourse loans) under the existing arrangements with
lenders,
33
<PAGE>
public authorities and others involved and that it was unlikely that the
Company would recover all of its investment in the property based on forecasts
of future cash flows.
The loss on dispositions of assets and other provisions, net, for 1992
consists primarily of costs incurred in connection with a private placement
with the Company and seven institutional investors of 9.5 million shares of
common stock of the Company previously owned by Trizec Investments Corporation
($2,231,000) and provisions for losses on a marketable equity security and
certain other investments based on management's determination that the
declines in their fair values were other than temporary ($4,156,000).
EXTRAORDINARY LOSSES, NET OF RELATED INCOME TAX BENEFITS. The extraordinary
losses in 1994, 1993 and 1992 resulted from early extinguishments or required
partial early redemptions of debt and aggregated $6,824,000, $12,322,000 and
$530,000, respectively, net of deferred income tax benefits of $2,377,000,
$4,271,000 and $182,000, respectively.
NET EARNINGS (LOSS). The Company had net earnings of $2,159,000 in 1994 and
net losses of $9,342,000 in 1993 and $16,197,000 in 1992. The Company's
operating income (after depreciation and amortization) was $21,259,000 in 1994
and $8,841,000 in 1993 and its operating loss was $15,529,000 in 1992. The
improvements in operating income in 1994 and 1993 were due primarily to the
factors described above. Net earnings (loss) for each year was affected by
unusual and/or nonrecurring items. The most significant of these are the items
discussed above in gain (loss) on dispositions of assets and other provisions,
net, and extraordinary losses, net of related income tax benefits.
EARNINGS BEFORE DEPRECIATION AND DEFERRED TAXES. The Company uses a
supplemental performance measure along with net earnings (loss) to report its
operating results. This measure, referred to as Earnings Before Depreciation
and Deferred Taxes ("EBDT"), is not a measure of operating results or cash
flows from operating activities as defined by generally accepted accounting
principles. Additionally, EBDT is not necessarily indicative of cash available
to fund cash needs, including the payment of dividends, and should not be
considered as an alternative to cash flows as a measure of liquidity. However,
the Company believes that EBDT provides relevant information about its
operations and is necessary, along with net earnings (loss), for an
understanding of its operating results.
Depreciation and amortization are excluded from EBDT because, based on the
Company's current value basis reporting, its operating properties are worth
substantially more than their undepreciated historical cost. Deferred income
taxes are excluded from EBDT because payments of income taxes have not been
and are not anticipated in the near term to be, significant to the Company.
Current federal and state income taxes are included as reductions of EBDT.
Gain (loss) on dispositions of assets and other provisions, net, and
extraordinary losses, net of related income tax benefits, represent unusual
and/or nonrecurring items and are therefore excluded from EBDT.
EBDT was $94,710,000 in 1994, $78,281,000 in 1993 and $52,282,000 in 1992.
The significant changes in various revenue and expense elements comprising
EBDT by segment are described above. The increases in EBDT in 1994 and 1993
were due primarily to improved results from the operating properties business
segment, particularly retail properties.
EBDT from retail properties was $103,978,000 in 1994, $87,248,000 in 1993
and $70,966,000 in 1992 and increased at rates of 19.2% and 22.9% in 1994 and
1993, respectively. The increases in EBDT for 1994 and 1993 reflect the
effects of re-leasing of space at higher effective rents, the operating
results of recently expanded properties and debt reductions and refinancing at
certain
34
<PAGE>
properties. The increase for 1993 also reflects slightly higher average
occupancy levels and tenant sales. Average occupancy and tenant sales for the
Company's portfolio of retail properties decreased slightly in 1994 when
compared to 1993; however, occupancy and sales actually improved at many of
the Company's larger, major market retail centers, most of which are wholly-
owned or at least 50% owned, and sales of high-performing merchants (i.e.,
those paying percentage rents) increased by 3.4%. These factors had a
disproportionate effect on EBDT and more than offset the effects of the
overall decrease in occupancy and tenant sales.
Office/mixed-use properties had EBDT of $4,273,000 in 1994 and $2,283,000 in
1993 and incurred a loss before depreciation and deferred taxes of $2,127,000
in 1992. The growth in EBDT in 1994 was attributable primarily to improved
average occupancy levels at certain office and hotel properties, the
operations of two industrial buildings in Columbia opened in 1993 and lower
interest expense due to debt reductions, refinancing and the exercise, in the
second quarter of 1994, of an option in a loan agreement to reduce the
effective interest rate on that loan. The growth in EBDT in 1993 was
attributable primarily to improved occupancy at several Columbia office
properties and urban mixed-use projects and lower interest expense due to debt
reductions, lower interest rates on floating rate debt and the expiration of
certain interest rate exchange agreements.
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
Management believes that the current values of the Company's assets and
liabilities are the most realistic indicators of the Company's financial
strength and future profitability. Current values of the Company's interests
in operating properties, including interests in unconsolidated real estate
ventures and properties held for development and sale, represent the present
values of forecasted net operating cash flows from these properties--the
Company's most significant assets. Since 1976, revaluation equity, the
aggregate increment of current value over cost basis net book value of the
Company's assets and liabilities, has increased at a compound annual rate of
15%. The majority of the Company's revaluation equity relates to prime
regional shopping centers. Larger, major market retail centers continue to be
a favored real estate investment and required investor yields in 1994 remained
relatively unchanged from 1993. Revaluation equity increased $107 million or
7.6% to $1.52 billion at December 31, 1994. The increase was due primarily to
higher levels of rents used in the forecasts of cash flows from retail
properties and is consistent with the Company's leasing activities and
operating results for 1994. Refinancing and other changes in financial
arrangements at certain projects also increased forecasted cash flows from
operating properties. In addition, the current value of publicly-traded debt
not specifically related to interests in properties decreased.
Cost basis shareholders' equity decreased to $95,026,000 at December 31,
1994 from $113,151,000 at December 31, 1993. The decrease was due primarily to
the payment of regular quarterly dividends on the common and Preferred stocks,
partially offset by the issuance of additional shares of Preferred stock.
The Company had cash and cash equivalents and investments in marketable
securities totaling $79,547,000 and $107,959,000 at December 31, 1994 and
1993, respectively, including $2,001,000 and $4,422,000, respectively, held
for restricted uses.
Net cash provided by operating activities was $113,775,000, $101,149,000 and
$66,630,000 in 1994, 1993 and 1992, respectively. The changes in cash provided
by operating activities were due primarily to the factors described in the
discussion and analysis of operating results. In addition, the level of net
cash provided by operating activities is affected by the timing of receipt of
revenues (including land sales proceeds) and the payment of operating and
interest expenses and land development costs.
35
<PAGE>
In 1994 and 1993, over 80% of the Company's debt was represented by
mortgages and bonds collateralized by operating properties. Scheduled
principal payments on property debt were $46,750,000, $20,735,000 and
$17,907,000 in 1994, 1993 and 1992, respectively. The increase in 1994 was due
primarily to the effects of refinancing certain office/mixed-use properties.
The annual maturities of debt for the next five years include balloon payments
of $83,748,000 in 1995, $33,585,000 in 1996, $87,507,000 in 1997, $38,682,000
in 1998 and $106,074,000 in 1999. The balloon payments for 1995 include
$56,337,000 related to a retail center mortgage which is due in December. The
Company expects to refinance the mortgage on a long term basis at or prior to
its scheduled maturity. The Company is confident that it will be able to make
the other balloon payments or arrange to refinance or extend their maturities
at or prior to the scheduled repayment dates. In January 1995, the Company
extinguished approximately $96,800,000 of fixed rate property debt prior to
its scheduled maturity and incurred an extraordinary loss of approximately
$7,100,000, net of related deferred income tax benefits. Proceeds from a
variable rate loan of $96,800,000 obtained in January 1995 and due in February
1996 and available cash were used to retire the debt and fund the prepayment
penalty. The Company believes it will be able to refinance this loan on a long
term basis at or prior to its scheduled maturity. The Company is continually
evaluating sources of capital, and management believes there are reasonable
and satisfactory sources available for all requirements without necessitating
property sales.
Cash expenditures for properties in development and improvements to existing
properties funded by debt were $78,628,000, $87,243,000 and $83,377,000 in
1994, 1993 and 1992, respectively. A substantial portion of the costs of
properties in development is financed with construction or similar loans.
Typically, long term fixed rate debt financing is arranged concurrently with
the construction financing prior to the commencement of construction.
Management anticipates that acceptable methods of financing development
projects with fixed rate, nonrecourse debt will continue to be available.
Improvements to existing properties funded by debt consist primarily of costs
of renovation and remerchandising programs and other capital improvement
costs. The Company's share of these costs has been financed primarily from
proceeds of refinancing of the related properties or other properties, credit
line borrowings and a portion of the proceeds of the 8.5% unsecured notes
issued in January 1993. The interest costs on these financings are included in
the operating results of the operating properties segment.
Cash expenditures for acquisitions of interests in properties were
$94,113,000 in 1994, $34,967,000 in 1993 and $38,806,000 in 1992. A
substantial portion of these costs has been financed using nonrecourse debt.
The acquisitions in 1994 consist primarily of the purchase of land underlying
a retail center and the related equity interest of the former lessor. The
acquisitions in 1993 and 1992 consist primarily of purchases of partners'
interests in retail properties.
The Company has available sources of capital in addition to those discussed
above. The Company's equity interests in its operating properties and
properties held for development and sale (principally Columbia land) and land
in development represent a source of funds either through sales or
refinancing. The aggregate equity value of these interests as of December 31,
1994 was approximately $2,339,000,000. The Company also has lines of credit
available totaling $159,720,000 which can be used to fund property acquisition
costs, finance other corporate needs, repay existing indebtedness or provide
corporate liquidity, subject to approval by the lenders. In addition, in
February 1995, the Company registered $150,000,000 of unsecured notes for
issuance to the public from time to time through February 1997. The Company
intends to use the proceeds from these notes to repay existing recourse
indebtedness.
The agreements relating to certain of the lines of credit, the 8.5%
unsecured notes, the unsecured notes registered in February 1995 and certain
other loans impose limitations on the Company. The most restrictive of these
limit the Company's ability to incur certain types of additional debt if the
Company does not maintain specified debt service coverage ratios. The
agreements also impose
36
<PAGE>
restrictions on sale, lease and certain other transactions, subject to various
exclusions and limitations. These restrictions have not limited the Company's
normal business activities.
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1995
OPERATING RESULTS
OPERATING PROPERTIES. Revenues from retail centers increased $94,000 and
$3,948,000 while total operating and interest expenses decreased $2,121,000
and $7,143,000 for the three and nine months ended September 30, 1995 as
compared to the same periods in 1994. The increases in revenues are
attributable to the operations of expansions opened in August 1994 and March
1995, higher effective rents on re-leased space, and, for the nine month
period, increased tenant lease cancellation payments. These increases have
been partially offset by the effects of slightly lower occupancy levels, lower
recoveries of operating expenses, as discussed below, the dispositions of
properties in the first quarter of 1994 and second quarter of 1995, and for
the three month period, decreased tenant lease cancellation payments. The
decreases in expenses are attributable to the aforementioned property
dispositions, lower recoverable expenses as a result of operating expense
reduction efforts and milder winter conditions experienced in the Northeast,
lower bad debt expenses due to recoveries of amounts previously reserved and
lower interest expense due to debt restructurings and refinancings completed
in 1994 or early 1995. These decreases were partially offset by an increase in
expenses associated with the operations of the expansions referred to above.
Revenues from office, mixed-use and other properties decreased $602,000 and
$146,000 and total operating and interest expenses decreased $1,801,000 and
$1,955,000 for the three and nine months ended September 30, 1995 as compared
to the same periods in 1994. The decreases in revenues are attributable
primarily to dispositions of properties in the third quarter of 1994 and the
second quarter of 1995, lower recoveries of operating expenses and, for the
three month period, decreased tenant lease cancellation payments. These
decreases have been partially offset by higher occupancy at certain hotel and
office properties in Columbia and, for the nine month period, increased tenant
lease cancellation payments. The decreases in total operating and interest
expenses are attributable primarily to the aforementioned property
dispositions, lower bad debt expenses due to recoveries of amounts previously
reserved, lower operating expenses at certain projects and lower depreciation
expense as the Company discontinued depreciating an industrial building it
intends to sell. These decreases are partially offset by expenses at two
industrial buildings in Columbia which opened in the second quarter of 1994
and higher interest expense on a mixed-use project. Interest on this project
loan was lower in the first quarter of 1994 because the Company exercised an
option in the loan agreement to make a specified payment and reduce the
effective interest rate on the loan retroactive to the beginning of its term.
The payment was less than the interest previously accrued, and the difference
was recorded as a reduction to interest expense in the quarter.
LAND SALES. Revenues from land sales decreased $2,754,000 and $7,227,000 and
total costs and expenses decreased $1,009,000 and $4,191,000 for the three and
nine months ended September 30, 1995, as compared to the same periods in 1994.
The decreases in revenues relate to lower sales of land for commercial/other
uses in Columbia. The decreases in costs and expenses are attributable
primarily to decreased costs of sales due to lower sales revenues.
DEVELOPMENT. These costs consist primarily of additions to the pre-
construction reserve and new business costs. The pre-construction reserve is
maintained to provide for costs of projects which may not go forward to
completion. New business costs relate primarily to the initial evaluation of
acquisition and development opportunities. These costs decreased $1,606,000
and $978,000 for the three and nine months ended September 30, 1995 as
compared to the same periods in 1994. The decreases are due primarily to
reduced provisions required for projects in the pre-construction stage due to
progress made in the development process, particularly in the third quarter of
1995.
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CORPORATE. Corporate interest costs were $3,275,000 and $3,754,000 for the
three months ended September 30, 1995 and 1994, respectively, and $10,479,000
and $10,322,000 for the nine months ended September 30, 1995 and 1994,
respectively. Of such amounts, $981,000 and $734,000 were capitalized during
the three months ended September 30, 1995 and 1994, respectively, and
$2,642,000 and $1,750,000 were capitalized during the nine months ended
September 30, 1995 and 1994, respectively, on funds invested in development
projects. The decrease in corporate interest costs for the three month period
is due to a lower level of debt used for corporate purposes.
GAIN (LOSS) ON DISPOSITIONS OF ASSETS AND OTHER PROVISIONS, NET. The net
loss in 1995 relates primarily to provisions for losses on several retail
center properties the Company has decided to sell and is actively marketing
($16,058,000). These provisions for losses were recognized based on the
estimated fair values of the individual properties less costs to sell. These
losses were partially offset by a gain related to the disposition of an
interest in a retail center property ($1,940,000).
The net loss in 1994 relates primarily to provisions for losses on
investments in two operating properties ($7,728,000) and damages to a retail
property as a result of an earthquake ($446,000). The provisions for losses
were recognized based on management's determination that the Company would not
continue to support the projects under the existing arrangements with lenders
and/or partners and that it was unlikely that the Company would recover all of
its investments in these projects based on forecasts of future cash flows.
These losses were partially offset by a gain related to the disposition of an
interest in a property the Company continues to manage ($2,768,000).
EARNINGS BEFORE DEPRECIATION AND DEFERRED TAXES. EBDT was $76,978,000 for
the nine months ended September 30, 1995, an increase of 15% over $67,115,000
in the comparable period of 1994. The significant changes in various revenue
and expense elements comprising EBDT are described above. The increase in 1995
is due primarily to improved operating results from retail properties.
EBDT from retail centers was $80,576,000, an increase of 15% over
$70,245,000 in the comparable period in 1994. The increase in EBDT from retail
centers reflects increased rents on re-leased space, recent productive
expansions of a number of centers, implementation of effective cost reduction
programs at the Company's properties, lease termination payments from some
departing retailers and refinancings and restructures of debt, management and
ownership agreements.
FINANCIAL CONDITION AND LIQUIDITY
Shareholders' equity decreased $40,543,000 from $95,026,000 at December 31,
1994 to $54,483,000 at September 30, 1995. The decrease was due principally to
the payment of regular quarterly dividends on the Company's common and
Preferred stocks, and to a lesser extent, the Company's net loss for the nine
months ended September 30, 1995.
The Company had cash and cash equivalents and investments in marketable
securities totaling $31,740,000 and $79,547,000 at September 30, 1995 and
December 31, 1994, respectively, including $640,000 and $2,001,000,
respectively, restricted for use in the development of certain properties.
In February 1995, the Company registered $150,000,000 of unsecured notes for
issuance to the public from time to time through February 1997. The notes can
be issued, subject to market conditions, for varying terms of nine months or
longer at fixed or floating rates based upon market indices at the time of
issuance. Proceeds of these notes have been or will be used primarily to repay
higher rate or recourse indebtedness of the Company. As of September 30, 1995,
the Company had issued $100,300,000 of notes, the proceeds of which were used
to repay higher rate and/or recourse indebtedness.
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The Company has lines of credit of $158,920,000 of which $119,920,000 was
available at September 30, 1995. These lines of credit may be used to provide
corporate liquidity, fund property acquisition costs and finance other
corporate needs, subject to lenders' approvals. They may also be utilized to
pay some portion of existing debt, including maturities in 1995 and 1996. As
of September 30, 1995, debt due in one year was $121,302,000. Approximately
$71,790,000 of this debt relates to a retail center mortgage due in February
1996. The Company expects to refinance this mortgage on a long-term basis at
or prior to its scheduled maturity. The Company continues to actively evaluate
new sources of capital and is confident that it will be able to make these
payments, arrange to refinance these maturities prior to their scheduled
repayment dates, or take advantage of new sources of capital without
necessitating property sales.
Net cash provided by operating activities was $69,525,000 and $79,008,000
for the nine months ended September 30, 1995 and 1994, respectively. The
factors discussed previously under the operating results of the four major
business segments, particularly lower land sale revenues, and, in 1995,
funding of certain pension obligations affected the level of net cash provided
by operating activities.
Net cash used in investing activities was $64,087,000 and $143,272,000 for
the nine months ended September 30, 1995 and 1994, respectively. The decrease
in net cash used of $79,165,000 occurred because of the higher level of
property acquisition expenditures incurred in 1994 ($66,118,000) and because
net sales and redemptions of marketable securities (primarily short-term U.S.
Treasury securities) increased $15,185,000 in 1995. The property acquisitions
in 1995 consist of the purchases of partnership interests in three retail
centers. The property acquisitions in 1994 consisted primarily of the purchase
of land underlying a retail center together with the related equity interest
of the former lessor.
Net cash used in financing activities was $28,633,000 for the nine months
ended September 30, 1995 while net cash provided by financing activities was
$41,086,000 for the nine months ended September 30, 1994. Net cash used in
financing activities in 1995 is attributable primarily to scheduled principal
payments on property debt and the payment of dividends, partially offset by
the issuance of other debt and property debt to partially fund the property
acquisitions described above. Net cash provided by financing activities in
1994 was attributable primarily to the issuance of property debt to fund the
property acquisition described above partially offset by scheduled principal
payments on property debt and the payment of dividends.
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DESCRIPTION OF THE PREFERRED SECURITIES
The Trust Agreement among Rouse, as Depositor (the "Depositor"), The First
National Bank of Chicago, as the Property Trustee, Michael J. Majchrzak, as
the Delaware Trustee, and the three Administrative Trustees named in the Trust
Agreement (together with the Property Trustee and the Delaware Trustee, the
"Trustees"), authorizes the issuance of the Preferred Securities by the
Issuer. The Preferred Securities and the Common Securities (together, the
"Issuer Securities") will be issued by the Administrative Trustees on behalf
of the Issuer pursuant to the terms of the Trust Agreement. The Preferred
Securities represent undivided beneficial interests in the assets of the
Issuer and entitle the holders thereof to a preference in certain
circumstances with respect to distributions and amounts payable on redemption
or liquidation over the Common Securities, as well as other benefits as
described in the Trust Agreement. The following summaries contain the material
information concerning the Trust Agreement but do not purport to be complete
and are subject to, and are qualified in their entirety by reference to, all
the provisions of the Trust Agreement, including the definitions therein of
certain terms, and the Trust Indenture Act. Wherever particular sections or
defined terms of the Trust Agreement are referred to, such sections or defined
terms are incorporated herein by reference. Section references used herein are
references to provisions of the Trust Agreement unless otherwise stated. The
Trust Agreement is filed as an exhibit to the Registration Statement of which
this Prospectus forms a part.
GENERAL
All of the Common Securities are owned by Rouse. The Common Securities rank
pari passu, and payments will be made thereon pro rata, with the Preferred
Securities except as described under "--Subordination of Common Securities".
(Section 4.03). Legal title to the Junior Subordinated Debentures will be held
in the name of the Property Trustee for the benefit of the holders of the
Issuer Securities. (Section 2.09). The Guarantee is an irrevocable guarantee
on a subordinated basis with respect to the Preferred Securities, but it does
not guarantee payment of distributions or amounts payable on redemption or
liquidation of the Preferred Securities when the Issuer does not have funds
sufficient to make such payments. The ability of the Issuer to make
distributions and pay other amounts on the Preferred Securities is solely
dependent upon Rouse making payments on the Junior Subordinated Debentures as
and when required. Such payments, if made in accordance with the terms of the
Indenture, will provide sufficient funds to enable the Issuer to make
distributions and pay other amounts on the Preferred Securities. Rouse has,
through the Guarantee, the Trust Agreement, the Junior Subordinated
Debentures, the Indenture and the Expense Agreement, taken together, fully,
irrevocably and unconditionally guaranteed all of the Issuer's obligations
under the Preferred Securities. No single document standing alone or operating
in conjunction with fewer than all of the other documents constitutes such
guarantee. It is only the combined operation of these documents that has the
effect of providing a full, irrevocable and unconditional guarantee of the
Issuer's obligations under the Preferred Securities. See "Relationship Among
the Preferred Securities, the Junior Subordinated Debentures and the
Guarantee--General".
Subject to applicable law (including, without limitation, United States
federal securities law), Rouse or its subsidiaries may at any time and from
time to time purchase outstanding Preferred Securities by tender, in the open
market or by private agreement.
DISTRIBUTIONS
The distributions payable on each Preferred Security will be pro rata with
the Common Securities and will be entitled to a preference fixed at a rate per
annum of % of the stated Liquidation Amount of $25 per Preferred Security.
Distributions that are in arrears for more than one quarter will
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bear interest on the amount thereof at the rate per annum of %, compounded
quarterly. The term "distributions" as used herein includes any such interest
payable, unless otherwise stated, and shall also include any Additional
Amounts with respect to the Preferred Securities. "Additional Amounts" means
the amount of Additional Interest Attributable to Deferral (as defined under
"Description of the Junior Subordinated Debentures--Additional Interest") paid
by Rouse on the Junior Subordinated Debentures. See "Description of the Junior
Subordinated Debentures--Additional Interest". The amount of distributions
payable for any period will be computed on the basis of a 360-day year of
twelve 30-day months. (Section 4.01(a) and 4.01(b)).
Distributions on the Preferred Securities will be cumulative, will accrue
from , 1995, the date of initial issuance thereof, and will be payable
quarterly in arrears, on March 31, June 30, September 30 and December 31 of
each year, commencing December 31, 1995, except as otherwise described below.
In the event that any date on which distributions are otherwise payable on the
Preferred Securities is not a Business Day (as defined below), payment of the
distribution payable on such date will be made on the next succeeding day that
is a Business Day (and without any interest or other payment in respect of any
such delay) except that, if such Business Day is in the next succeeding
calendar year, payment of such distribution shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on such date (each date on which distributions are otherwise payable in
accordance with the foregoing, a "Distribution Date"). A "Business Day" shall
mean any day other than (x) a Saturday or a Sunday, (y) a day on which banks
in Maryland or the City of New York are authorized or obligated by law or
executive order to remain closed or (z) a day on which the corporate trust
office of the Property Trustee or the principal corporate trust office of the
Debenture Trustee (as defined under "Description of the Junior Subordinated
Debentures") is closed for business. (Section 4.01(a)).
Rouse has the right under the Indenture to extend the interest payment
period from time to time on the Junior Subordinated Debentures to a period of
up to 20 consecutive quarters, with the consequence that quarterly
distributions on the Preferred Securities would be deferred (but would
continue to accrue with interest thereon, including interest payable on unpaid
interest at the rate per annum set forth above, compounded quarterly) by the
Issuer during any such extended interest payment period. In the event that
Rouse exercises this right, during such period Rouse may not declare or pay
any dividend or distribution (other than a dividend or distribution in common
stock of Rouse or other security junior in right of payment to the Junior
Subordinated Debentures) on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of its capital stock, or make any
guarantee payments with respect to the foregoing (other than payments under
the Guarantee), or repurchase or cause any subsidiary to repurchase any
security of Rouse ranking pari passu with or subordinate to the Junior
Subordinated Debentures (except on a ratable basis with securities ranking
pari passu with the Junior Subordinated Debentures). Prior to the termination
of any such extended interest payment period, Rouse may further extend the
interest payment period, provided that such extended interest payment period
together with all such previous and further extensions thereof may not exceed
20 consecutive quarters or extend beyond the maturity of the Junior
Subordinated Debentures. Upon the termination of any extended interest payment
period and the payment of all amounts then due, Rouse may select a new
extended interest payment period, subject to the foregoing requirements. See
"Description of the Junior Subordinated Debentures--Interest" and "--Option to
Extend Interest Payment Period".
It is anticipated that the income of the Issuer available for distribution
to the holders of the Preferred Securities will be limited to payments under
the Junior Subordinated Debentures which the Issuer will purchase with the
proceeds from the issuance and sale of the Common Securities and the Preferred
Securities. See "Description of the Junior Subordinated Debentures". If Rouse
does not make interest payments on the Junior Subordinated Debentures, the
Property Trustee will not have funds available to pay distributions on the
Preferred Securities. The payment of distributions (if and to
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the extent the Issuer has funds sufficient to make such payments) is
guaranteed on a subordinated basis by Rouse to the extent set forth herein
under "Description of the Guarantee--Status of the Guarantee".
Distributions on the Preferred Securities will be payable to the holders
thereof as they appear on the register for the Preferred Securities of the
Issuer on the relevant record dates, which, as long as the Preferred
Securities remain in book-entry-only form, will be one Business Day prior to
the relevant Distribution Date. Subject to any applicable laws and regulations
and the provisions of the Trust Agreement, each such payment will be made as
described under "--Book-Entry-Only Issuance--The Depository Trust Company"
below. In the event the Preferred Securities do not remain in book-entry-only
form, the relevant record date shall be the date 15 days prior to the relevant
Distribution Date, whether or not a Business Day. (Section 4.01 (d)).
REDEMPTION
Upon the repayment of the Junior Subordinated Debentures, whether at
maturity or upon earlier redemption as provided in the Indenture, the proceeds
from such repayment shall be applied by the Property Trustee to redeem a Like
Amount (as defined below) of Issuer Securities, upon not less than 30 nor more
than 60 days' notice, at $25 per Preferred Security plus accumulated and
unpaid distributions to the Redemption Date, whether or not earned or declared
(the "Redemption Price"). Such payment in redemption shall be made to the
extent that the Trust has funds available for such payment. Rouse may not
redeem the Junior Subordinated Debentures in part unless all accrued and
unpaid interest (including any Additional Interest) has been paid in full on
all outstanding Junior Subordinated Debentures for all quarterly interest
periods terminating on or prior to the date of redemption and no Extension
Period is in effect. See "Description of the Junior Subordinated Debentures--
Optional Redemption".
Rouse has the right to redeem the Junior Subordinated Debentures (a) on or
after , 2000, in whole or in part, with the proceeds of one or more
Equity Issuances or (b) at any time, in whole but not in part, on the
occurrence of a Tax Event unless Rouse determines to distribute the Junior
Subordinated Debentures to the holders of the Preferred Securities, subject to
the conditions described under "Description of the Junior Subordinated
Debentures--Optional Redemption". If (i) a Tax Event shall occur and be
continuing and (ii) Rouse elects to redeem the Junior Subordinated Debentures,
notice of redemption shall be given by the Property Trustee, mailed to holders
of Issuers Securities not less than 30 nor more than 60 days prior to the
Redemption Date.
"Capital Stock" of the Company means any and all shares, interests,
participations or other equivalents (however designated) of the Company's
capital stock (including, without limitation, common stock and preferred
stock) or other equity interests whether now outstanding or issued after the
date of the Indenture.
"Equity Issuance" means (i) an issuance by Rouse of its Capital Stock or
(ii) a PIPS Issuance.
"Like Amount" means (i) with respect to a redemption of Issuer Securities,
Issuer Securities having an aggregate Liquidation Amount equal to the
principal amount of Junior Subordinated Debentures to be contemporaneously
redeemed in accordance with the Indenture and (ii) with respect to a
distribution of Junior Subordinated Debentures to holders of Issuer Securities
in connection with a Tax Event or a liquidation of the Issuer upon the
bankruptcy, dissolution or liquidation of Rouse, Junior Subordinated
Debentures having a principal amount equal to the aggregate Liquidation Amount
of the Issuer Securities of the holder to whom such Junior Subordinated
Debentures are distributed.
"PIPS Issuance" means an issuance by any affiliate of Rouse of periodic
income preferred securities which are substantially comparable in economic
effect to the Preferred Securities, the
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proceeds of which are invested in debt securities of Rouse which are
substantially comparable in economic effect to the Junior Subordinated
Debentures.
"Tax Event" means the receipt by the Issuer or the Company, as the case may
be, of an opinion of counsel experienced in such matters to the effect that,
as a result of (i) any amendment to, clarification of, or change (including
any announced prospective change) in, the laws or treaties (or any regulations
thereunder) of the United States or any political subdivision or taxing
authority thereof or therein affecting taxation, (ii) any judicial decision,
official administrative pronouncement, ruling, regulatory procedure, notice or
announcement (including any notice or announcement of intent to adopt such
procedures or regulations) ("Administrative Action") or (iii) any amendment
to, clarification of, or change in the official position or the interpretation
of such Administrative Action or judicial decision or any interpretation or
pronouncement that provides for a position with respect to such Administrative
Action or judicial decision that differs from the theretofore generally
accepted position, in each case, by any legislative body, court, governmental
authority or regulatory body, irrespective of the manner in which such
amendment, clarification or change is made known, which amendment,
clarification, or change is effective or such pronouncement or decision is
announced on or after the first date of issuance of the Preferred Securities,
there is more than an insubstantial risk that (a) the Issuer is, or will be,
subject to United States federal income tax with respect to interest received
on the Junior Subordinated Debentures, (b) interest payable by the Company on
the Junior Subordinated Debentures is not, or will not be, fully deductible
for United States federal income tax purposes or (c) the Issuer is, or will
be, subject to more than a de minimis amount of other taxes, duties or other
governmental charges.
REDEMPTION PROCEDURES
Preferred Securities redeemed on each date fixed for redemption (the
"Redemption Date") shall be redeemed at the Redemption Price with the proceeds
from the contemporaneous redemption of Junior Subordinated Debentures.
Redemptions of the Preferred Securities will be made and the Redemption Price
will be payable on each Redemption Date only to the extent that the Issuer has
funds sufficient for the payment of such Redemption Price. (Section 4.02(d)).
See "--Subordination of Common Securities".
If the Property Trustee gives a notice of redemption in respect of Preferred
Securities (which notice will be irrevocable), then, by 12:00 noon, New York
time, on the Redemption Date, the Property Trustee will, so long as the
Preferred Securities are in book-entry-only form and to the extent that the
Trust has funds immediately available for payment of the applicable Redemption
Price, irrevocably deposit with DTC funds sufficient to pay the Redemption
Price and, at the direction of the Depositor, will give DTC irrevocable
instructions and authority to pay the Redemption Price to the holders of the
Preferred Securities. See "--Book-Entry-Only Issuance--The Depository Trust
Company". If the Preferred Securities are no longer in book-entry-only form,
the Property Trustee, to the extent that the Trust has funds immediately
available for the payment of the Redemption Price, will irrevocably deposit
with the paying agent for the Preferred Securities (the "Preferred Securities
Paying Agent") funds sufficient to pay the applicable Redemption Price and
will give the Preferred Securities Paying Agent irrevocable instructions and
authority to pay the Redemption Price to the holders thereof upon surrender of
their certificates evidencing Preferred Securities. Notwithstanding the
foregoing, distributions payable on or prior to the Redemption Date for any
Preferred Securities called for redemption shall be payable to the holders of
such Preferred Securities on the relevant record dates for the related
Distribution Dates. If notice of redemption shall have been given and funds
deposited as required, then upon the date of such deposit, all rights of
holders of such Preferred Securities so called for redemption will cease,
except the right of the holders of such Preferred Securities to receive the
Redemption Price, but without interest on such Redemption Price, and such
Preferred Securities will cease to be outstanding. In the event that any date
fixed for redemption of Preferred Securities is
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not a Business Day, then payment of the Redemption Price payable on such date
will be made on the next succeeding day which is a Business Day (and without
any interest or other payment in respect of any such delay), except that, if
such Business Day falls in the next calendar year, such payment will be made
on the immediately preceding Business Day. In the event that payment of the
Redemption Price in respect of Preferred Securities called for redemption is
improperly withheld or refused and not paid either by the Issuer or by Rouse
pursuant to the Guarantee described herein under "Description of the
Guarantee", distributions on such Preferred Securities will continue to accrue
from the original Redemption Date to the date of payment, in which case the
actual payment date will be considered the date fixed for redemption for
purposes of calculating the Redemption Price. (Section 4.02(e)).
If less than all the outstanding Issuer Securities are to be redeemed on a
Redemption Date, then the aggregate amount to be paid shall be allocated 3% to
the Common Securities and 97% to the Preferred Securities. The particular
Preferred Securities to be redeemed will be selected not more than 60 days
prior to the Redemption Date by the Property Trustee from the outstanding
Preferred Securities not previously called for redemption, by such method as
the Property Trustee shall deem fair and appropriate and which may provide for
the selection for redemption of portions (equal to $25 or integral multiples
thereof) of the aggregate Liquidation Amount of Preferred Securities. The
Property Trustee shall promptly notify the Preferred Securities Securities
Registrar (as defined under "--Registrar and Transfer Agent"), in writing, of
the Preferred Securities selected for redemption and, in the case of any
Preferred Securities selected for partial redemption, the Liquidation Amount
thereof to be redeemed. For purposes of the Trust Agreement, unless the
context otherwise requires, all provisions relating to the redemption of
Preferred Securities will relate, in the case of any Preferred Securities
redeemed or to be redeemed only in part, to the portion of the aggregate
Liquidation Amount of Preferred Securities that has been or is to be redeemed.
(Section 4.02(f)).
SUBORDINATION OF COMMON SECURITIES
Payment of distributions (including Additional Amounts, if applicable) on,
and the Redemption Price of, the Issuer Securities, as applicable, shall be
made pro rata based on the aggregate liquidation amount of the Issuer
Securities; provided, however, that if on any Distribution Date or Redemption
Date an Event of Default (as defined herein, see "--Events of Default;
Notice") under the Indenture shall have occurred and be continuing, no payment
of any distribution (including Additional Amounts, if applicable) on, or
Redemption Price of, any Common Security, and no other payment on account of
the redemption, liquidation or other acquisition of Common Securities, shall
be made unless payment in full in cash of all accumulated and unpaid
distributions (including Additional Amounts, if applicable) on all outstanding
Preferred Securities for all distribution periods terminating on or prior
thereto, or in the case of payment of the Redemption Price the full amount of
such Redemption Price on all outstanding Preferred Securities called for
redemption, shall have been made or provided for, and all funds legally
available to the Property Trustee shall first be applied to the payment in
full in cash of all distributions (including Additional Amounts, if
applicable) on, or Redemption Price of, Preferred Securities then due and
payable. (Section 4.03(a)).
In the case of any Event of Default under the Trust Agreement, the holders
of Common Securities will be deemed to have waived any right to act with
respect to any such Event of Default under the Trust Agreement until the
effect of all such Events of Default with respect to the Preferred Securities
have been cured, waived or otherwise eliminated. Until any such Events of
Default under the Trust Agreement with respect to the Preferred Securities
have been so cured, waived or otherwise eliminated, the Property Trustee shall
act solely on behalf of the holders of the Preferred Securities and not the
holder of the Common Securities, and only the holders of the Preferred
Securities will have the right to direct the Property Trustee to act on their
behalf. (Section 4.03(b)).
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LIQUIDATION DISTRIBUTION UPON DISSOLUTION
Pursuant to the Trust Agreement, the Issuer shall dissolve and be liquidated
by the Trustees on the first to occur of: (i) December 31, 2050, the
expiration of the term of the Trust; (ii) the bankruptcy, insolvency,
dissolution or liquidation of Rouse; (iii) the occurrence of a Tax Event and a
related redemption of the Preferred Securities for cash or the distribution of
Junior Subordinated Debentures to holders of Issuer Securities as described
further below; (iv) the redemption of all of the Preferred Securities; and (v)
upon the entry of a decree of judicial dissolution of the Trust. (Sections
9.01 and 9.02).
If an early termination occurs as described in clause (ii) or (v) above or
if upon the occurrence of a Tax Event, Rouse chooses to distribute the Junior
Subordinated Debentures to the holders of the Issuer Securities, the Issuer
shall be liquidated by the Trustees as expeditiously as the Trustees determine
to be appropriate by causing the Property Trustee to distribute to each holder
of Preferred Securities and Common Securities, after satisfaction of
liabilities to creditors of the Trust, a Like Amount of Junior Subordinated
Debentures (and Additional Amounts, if applicable), unless such distribution
is determined by the Property Trustee not to be practical, in which event such
holders will be entitled to receive, out of the assets of the Issuer available
for distribution to holders after satisfaction of liabilities to creditors of
the Trust, an amount equal to, in the case of holders of Preferred Securities,
the aggregate of the stated Liquidation Amount of $25 per Preferred Security
plus accrued and unpaid distributions thereon to the date of payment, whether
or not earned or declared (such amount being the "Liquidation Distribution").
If such Liquidation Distribution can be paid only in part because the Issuer
has insufficient assets available to pay in full the aggregate Liquidation
Distribution, then the amounts payable directly by the Issuer on the Preferred
Securities shall be paid on a pro rata basis. The Trustees shall be required
to follow the direction of Rouse to dissolve the Trust and distribute the
Junior Subordinated Debentures to holders of Preferred Securities and Common
Securities only if the Trust shall have received an opinion of counsel
experienced in such matters to the effect that the holders of Preferred
Securities will not recognize any gain or loss for United States federal
income tax purposes as a result of such distribution. The holder of the Common
Securities will be entitled to receive distributions upon any such dissolution
pro rata with the holders of the Preferred Securities; except that, if an
Event of Default (as defined herein, see "--Events of Default; Notice") has
occurred and is continuing, the holder of the Common Securities will be
entitled to receive such distributions only after the holders of the Preferred
Securities have been paid in full. If the Junior Subordinated Debentures are
distributed to the holders of the Preferred Securities, Rouse will use its
reasonable efforts to have the Junior Subordinated Debentures listed on the
New York Stock Exchange or such other exchange upon which Preferred Securities
are then listed (Sections 4.02 and 9.04).
EVENTS OF DEFAULT; NOTICE
"Events of Default" as defined in Section 501 of the Indenture (see
"Description of the Junior Subordinated Debentures--Events of Default")
constitute the only "Events of Default" under the Trust Agreement with respect
to the Preferred Securities issued thereunder.
The Indenture provides that any one or more of the following described
events that has occurred and is continuing constitutes an "Event of Default"
with respect to the Junior Subordinated Debentures:
(a) failure for 30 days to pay any interest on the Junior Subordinated
Debentures, including any Additional Interest in respect thereof, when due
(subject to the deferral of any due date in the case of an Extension
Period); or
(b) failure to pay any principal on the Junior Subordinated Debentures
when due, whether at maturity, upon redemption by declaration or otherwise;
or
(c) failure to observe or perform in any material respect any other
covenant contained in the Indenture for 90 days after written notice to
Rouse from the Debenture Trustee or the holders of at least 25% in
principal amount of the outstanding Junior Subordinated Debentures; or
(d) certain events in bankruptcy, insolvency or reorganization of Rouse.
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Within five Business Days after the occurrence of any Event of Default
actually known to the Property Trustee, the Property Trustee shall transmit
notice of such Event of Default to the holders of Preferred Securities, the
Administrative Trustees and the Depositor, unless such Event of Default shall
have been cured or waived. (Section 8.02).
Unless an Event of Default shall have occurred and be continuing, any
Trustee may be removed at any time by act of the holder of the Common
Securities. If an Event of Default has occurred and is continuing, any Trustee
may be removed at such time by written act of the holders of a majority in
aggregate Liquidation Amount of the outstanding Preferred Securities,
delivered to such Trustee (in its individual capacity and on behalf of the
Issuer). No registration or removal of a Trustee and no appointment of a
successor trustee shall be effective until the acceptance of appointment by
the successor Trustee in accordance with the provisions of the Trust Agreement
(Section 8.10).
If an Event of Default has occurred and is continuing, the Preferred
Securities shall have a preference over the Common Securities upon dissolution
of the Issuer as described above. See "--Liquidation Distribution Upon
Dissolution".
MERGER OR CONSOLIDATION OF A TRUSTEE
Any Person (as defined in the Trust Agreement) into which the Property
Trustee or, if not a natural person, the Delaware Trustee or any
Administrative Trustee may be merged or with which it may be consolidated, or
any Person resulting from any merger, conversion or consolidation to which any
such Trustee shall be a party, or any Person succeeding to all or
substantially all the corporate trust business of any such Trustee, shall be
the successor to such Trustee under the Trust Agreement, provided such Person
is otherwise qualified and eligible. (Section 8.12).
VOTING RIGHTS
Except as provided below and as described under "Description of the
Guarantee--Amendments and Assignment" and as otherwise required by law, the
holders of the Preferred Securities will have no voting rights. (Section
6.01(a)).
Subject to the provisions described below under "--Modification of the Trust
Agreement", if any proposed amendment to the Trust Agreement provides for, or
the Trustees otherwise propose to effect, (i) any action that would adversely
affect the powers, preferences or special rights of the holders of the
Preferred Securities, whether by way of amendment to the Trust Agreement or
otherwise, or (ii) the dissolution, winding-up or termination of the Issuer,
other than pursuant to the Trust Agreement, then the holders of outstanding
Preferred Securities will be entitled to vote on such amendment or proposal,
and such amendment or proposal shall not be effective except with the approval
of the holders of at least a majority in aggregate Liquidation Amount of such
outstanding Preferred Securities. (Section 6.01(c)).
So long as any Junior Subordinated Debentures are held in the name of the
Property Trustee for the benefit of the holders of the Issuer Securities, the
Property Trustee shall not (i) direct the time, method and place of conducting
any proceeding for any remedy available to the Debenture Trustee (as defined
under "Description of the Junior Subordinated Debentures"), or executing any
trust or power conferred on the Debenture Trustee with respect to the Junior
Subordinated Debentures, (ii) waive any past default which is waivable under
Section 513 of the Indenture, (iii) exercise any right to rescind or annul a
declaration that the principal of all the Junior Subordinated Debentures shall
be due and payable or (iv) consent to any amendment, modification or
termination of the Indenture or the Junior Subordinated Debentures, where such
consent shall be required, without, in each case, obtaining the prior approval
of the holders of at least a majority in aggregate Liquidation Amount of the
outstanding Preferred Securities; provided, however, that where a consent
under the Indenture
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would require the consent of each holder of Junior Subordinated Debentures
affected thereby, no such consent shall be given by the Property Trustee
without the prior consent of each holder of Preferred Securities. The Property
Trustee shall not revoke any action previously authorized or approved by a
vote of the holders of the outstanding Preferred Securities. The Property
Trustee shall notify all holders of the Preferred Securities of any notice of
default received from the Debenture Trustee. In addition to obtaining the
foregoing approvals of the holders of the Preferred Securities, prior to
taking any of the foregoing actions, the Trustees shall obtain an opinion of
counsel experienced in such matters to the effect that the Issuer will not be
classified as an association taxable as a corporation for United States
federal income tax purposes on account of such action. (Section 6.01(b)).
Any required approval of holders of Preferred Securities may be given at a
separate meeting of holders of Preferred Securities convened for such purpose
or pursuant to written consent. The Administrative Trustees will cause a
notice of any meeting at which holders of Preferred Securities are entitled to
vote, or of any matter upon which action by written consent of such holders is
to be taken, to be given to each holder of record of Preferred Securities in
the manner set forth in the Trust Agreement. (Sections 6.02 and 6.06).
No vote or consent of the holders of Preferred Securities will be required
for the Issuer to redeem and cancel Preferred Securities in accordance with
the Trust Agreement.
For purposes of any vote of the holders of the Preferred Securities, any
Preferred Securities that are held by Rouse, any Trustee or any affiliate of
Rouse or any Trustee, shall, for purposes of such vote or consent, be treated
as if they were not outstanding.
CO-PROPERTY TRUSTEES AND SEPARATE PROPERTY TRUSTEE
Unless an Event of Default under the Trust Agreement shall have occurred and
be continuing, at any time or times, for the purpose of meeting the legal
requirements of the Trust Indenture Act or of any jurisdiction in which any
part of the Trust Property (as defined in the Trust Agreement) may at the time
be located, the holder of the Common Securities and the Administrative
Trustees shall have power to appoint, and upon the written request of the
Administrative Trustees, Rouse, as Depositor, shall for such purpose join with
the Administrative Trustees in the execution, delivery and performance of all
instruments and agreements necessary or proper to appoint, one or more persons
approved by the Property Trustee either to act as co-property trustee, jointly
with the Property Trustee, of all or any part of such Trust Property, or to
act as separate trustee of any such property, in either case with such powers
as may be provided in the instrument of appointment, and to vest in such
person or persons in such capacity, any property, title, right or power deemed
necessary or desirable, subject to the provisions of the Trust Agreement. If
Rouse, as Depositor, does not join in such appointment within 15 days after
the receipt by it of a request so to do, or in case an Event of Default under
the Indenture has occurred and is continuing, the Property Trustee alone shall
have the power to make such appointment. (Section 8.09).
PAYMENT AND PAYING AGENT
Payments in respect of the Preferred Securities shall be made to DTC, which
shall credit the relevant accounts at DTC on the applicable Distribution Dates
or, if the Preferred Securities are not held by DTC, such payments shall be
made at the office or agency of the Preferred Securities Paying Agent
maintained for such purpose, or at the option of the Property Trustee, by
check mailed to the address of the holder entitled thereto as such address
shall appear on the securities register. The Preferred Securities Paying Agent
shall initially be The First National Bank of Chicago. The Preferred
Securities Paying Agent shall be permitted to resign as Preferred Securities
Paying Agent upon 30 days' written notice to the Administrative Trustees, the
Property Trustee and Rouse. In the event that The First National Bank of
Chicago chooses no longer to be the Preferred Securities Paying
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Agent, the Administrative Trustees shall appoint a successor (which shall be a
bank or trust company) acceptable to the Property Trustee and Rouse to act as
Preferred Securities Paying Agent (Sections 4.04 and 5.09).
BOOK-ENTRY-ONLY ISSUANCE -- THE DEPOSITORY TRUST COMPANY
DTC will act as securities depository for the Preferred Securities. Upon
original issuance, the Preferred Securities will be issued only as fully-
registered securities registered in the name of Cede & Co. (DTC's nominee).
One or more fully-registered global Preferred Security certificates will be
issued, representing in the aggregate the total number of Preferred
Securities, and will be deposited with DTC.
DTC has informed the Issuer and Rouse that it is a limited-purpose trust
company organized under the New York Banking Law, a "banking organization"
within the meaning of the New York Banking Law, a member of the Federal
Reserve System, a "clearing corporation" within the meaning of the New York
Uniform Commercial Code, and a "clearing agency" registered pursuant to the
provisions of Section 17A of the Exchange Act. DTC holds securities that its
participants ("Participants") deposit with DTC. DTC also facilitates the
settlement of securities transactions among Participants through electronic
computerized book-entry changes in Participants' accounts, thereby eliminating
the need for physical movement of securities certificates. Direct Participants
include securities brokers and dealers (including the Underwriters), banks,
trust companies, clearing corporations and certain other organizations
("Direct Participants"). DTC is owned by a number of its Direct Participants
and by the New York Stock Exchange, the American Stock Exchange, Inc. and the
National Association of Securities Dealers, Inc. Access to the DTC system is
also available to others such as securities brokers and dealers, banks and
trust companies that clear through or maintain a custodial relationship with a
Direct Participant, either directly or indirectly ("Indirect Participants").
The rules applicable to DTC and its Participants are on file with the
Commission.
Purchases of Preferred Securities within the DTC system must be made by or
through Direct Participants, which will receive a credit for the Preferred
Securities on DTC's records. The ownership interest of each actual purchaser
of each Preferred Security ("Beneficial Owner") is in turn to be recorded on
the Direct Participants and Indirect Participants' records. Beneficial Owners
will not receive written confirmation from DTC of their purchases, but
Beneficial Owners are expected to receive written confirmations providing
details of the transactions, as well as periodic statements of their holdings,
from the Direct Participants or Indirect Participants through which the
Beneficial Owners purchased Preferred Securities. Transfers of ownership
interests in the Preferred Securities are to be accomplished by entries made
on the books of Participants acting on behalf of Beneficial Owners. Beneficial
Owners will not receive certificates representing their ownership interests in
Preferred Securities, except as described below.
DTC has no knowledge of the actual Beneficial Owners of the Preferred
Securities; DTC's records reflect only the identity of the Direct Participants
to whose accounts such Preferred Securities are credited, which may or may not
be the Beneficial Owners. The Participants are responsible for keeping account
of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed
by arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time.
Redemption notices shall be sent to DTC. If less than all of the Preferred
Securities are being redeemed, DTC's practice is to determine by lot the
amount of the interest of each Direct Participant in such series to be
redeemed.
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Although voting with respect to the Preferred Securities is limited to the
holders of record of the Preferred Securities, in those cases where a vote is
required, neither DTC nor Cede & Co., will itself consent or vote with respect
to Preferred Securities. Under its usual procedures, DTC would mail an Omnibus
Proxy to the Issuer as soon as possible after the record date. The Omnibus
Proxy assigns Cede & Co.'s consenting or voting rights to those Direct
Participants to whose accounts the Preferred Securities are credited on the
record date (identified in a listing attached to the Omnibus Proxy).
Distribution payments on the Preferred Securities will be made by the Issuer
to DTC. DTC's practice is to credit Direct Participants' accounts on the
relevant payment date in accordance with their respective holdings shown on
DTC's records unless DTC has reason to believe that it will not receive
payments on such payment date. Payments by Participants to Beneficial Owners
will be governed by standing instructions and customary practices and will be
the responsibility of such Participant and not of DTC, the Issuer, Rouse or
any Trustee, subject to any statutory or regulatory requirements as may be in
effect from time to time. Payment of distributions to DTC is the
responsibility of the Issuer, disbursement of such payments to Direct
Participants is the responsibility of DTC, and disbursement of such payments
to the Beneficial Owners is the responsibility of Direct and Indirect
Participants.
The Preferred Securities will be delivered in certificated form if (i) DTC
ceases to be registered as a clearing agency under the Exchange Act or is no
longer willing or able to provide securities depository services with respect
to the Preferred Securities, (ii) Rouse so determines or (iii) there is an
Event of Default under the Junior Subordinated Debentures.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that the Company and the Issuer believe to be
reliable. None of the Issuer, Rouse or any Trustee has any responsibility for
the performance by DTC or its Participants of their respective obligations as
described herein or under the rules and procedures governing their respective
operations.
REGISTRAR AND TRANSFER AGENT
The First National Bank of Chicago will act as registrar and transfer agent
for the Preferred Securities (the "Preferred Securities Registrar"). (Section
5.04).
As described under "--Book-Entry-Only Issuance--The Depository Trust
Company", so long as the Preferred Securities are in book-entry form,
registration of transfers and exchanges of Preferred Securities will be made
through Direct Participants and Indirect Participants in DTC. If physical
certificates representing the Preferred Securities are issued, registration of
transfers and exchanges of Preferred Securities will be effected without
charge by or on behalf of the Issuer, but, in the case of a transfer, upon
payment (with the giving of such indemnity as the Issuer or Rouse may require)
in respect of any tax or other governmental charges which may be imposed in
relation to it. (Section 5.04).
The Issuer will not be required to register or cause to be registered any
transfer of Preferred Securities during a period beginning 15 days prior to
the mailing of notice of redemption of Preferred Securities and ending on the
day of such mailing. (Section 5.04).
INFORMATION CONCERNING THE PROPERTY TRUSTEE
The Property Trustee, other than during the occurrence and continuance of a
default by Rouse in performance of the Trust Agreement, undertakes to perform
only such duties as are specifically set forth in the Trust Agreement and,
after an Event of Default under the Trust Agreement, must exercise the same
degree of care and skill as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs. Subject to this
provision, the Property Trustee is under no obligation to exercise any of the
powers vested in it by the Trust Agreement at the request of any
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holder of Issuer Securities unless it is offered reasonable indemnity against
the costs, expenses and liabilities that might be incurred thereby.
Rouse and certain of its subsidiaries maintain deposit accounts and conduct
other banking transactions with the Property Trustee in the ordinary course of
their businesses.
MODIFICATION OF THE TRUST AGREEMENT
From time to time, Rouse and the Trustees may, without the consent of any
holders of the Issuer Securities, amend the Trust Agreement for specified
purposes, including, among other things, (i) to cure ambiguities, correct or
supplement any provision of the Trust Agreement which may be inconsistent with
any other provision thereof or to make any other provisions with respect to
matters or questions arising under the Trust Agreement, which shall not be
inconsistent with the other provisions of the Trust Agreement, or (ii) to
ensure that the Trust will not be classified for United States federal income
tax purposes as an association taxable as a corporation and will not be
required to register as an "investment company" under the Investment Company
Act of 1940, as amended (the "1940 Act"); provided, however, that such
amendment or action shall not adversely affect the rights of any holder of the
Issuer Securities. The Trust Agreement contains provisions permitting Rouse
and the Trustees, with the consent of the holders of not less than a majority
in aggregate liquidation amount of the outstanding Issuer Securities, to
modify the Trust Agreement in a manner affecting the rights of the holders of
the Issuer Securities; provided that no such modification may, without the
consent of the holder of each outstanding Issuer Security, (i) change the
amount, timing, place of payment or currency of any distribution on the Issuer
Securities or otherwise adversely affect the amount of any distribution
required to be made in respect of the Issuer Securities as of a specified
date, (ii) restrict the right of any holder of the Issuer Securities to
institute suit for the enforcement of any payment under the Trust Agreement,
(iii) modify the purposes of the Trust, (iv) authorize or issue any interest
in the Trust other than as currently contemplated by the Trust Agreement, (v)
change the Redemption Price or modify the redemption procedures with respect
to Issuer Securities or (vi) affect the limited liability of any holder of
Preferred Securities. (Section 10.02).
GOVERNING LAW
The Trust Agreement will be governed by, and construed in accordance with,
the laws of the State of Delaware. (Section 10.05).
MISCELLANEOUS
The Preferred Securities have been approved for listing on the New York
Stock Exchange, subject to notice of issuance, under the symbol "RSEPrZ".
The Administrative Trustees are authorized and directed to conduct the
affairs of the Issuer and to operate the Issuer so that the Issuer will not be
deemed to be an "investment company" required to be registered under the 1940
Act or taxed as a corporation for United States federal income tax purposes
and so that the Junior Subordinated Debentures will be treated as indebtedness
of Rouse for United States federal income tax purposes. In this connection
Rouse and the Administrative Trustees are authorized to take any action, not
inconsistent with applicable law, the certificate of trust of the Issuer or
the Trust Agreement that Rouse or any of the Administrative Trustees
determines in their discretion to be necessary or desirable or convenient for
such purposes, as long as such action does not adversely affect the interests
of the holders of the Preferred Securities. (Section 2.07(d)).
The Property Trustee will act as sole trustee under the Trust Agreement for
the purposes of compliance with the Trust Indenture Act.
The Preferred Securities will, upon issuance, be validly issued, fully paid
and non-assessable. Holders of the Issuer Securities have no preemptive
rights.
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DESCRIPTION OF THE GUARANTEE
Set forth below is a summary of information concerning the Guarantee that
will be executed and delivered by Rouse for the benefit of the holders from
time to time of Preferred Securities. The Guarantee will be qualified as an
indenture under the Trust Indenture Act. The First National Bank of Chicago
will act as indenture trustee (the "Guarantee Trustee") under the Guarantee
for the purposes of compliance with the Trust Indenture Act. The terms of the
Guarantee will be those set forth in such Guarantee and those made part of
such Guarantee by the Trust Indenture Act. This summary contains all material
information concerning the Guarantee but does not purport to be complete and
is subject in all respects to the provisions of, and is qualified in its
entirety by reference to, the Guarantee, which is filed as an exhibit to the
Registration Statement of which this Prospectus forms a part, and the Trust
Indenture Act. The Guarantee Trustee will hold the Guarantee for the benefit
of the holders of the Preferred Securities.
GENERAL
Rouse will irrevocably agree to pay in full on a subordinated basis, to the
extent set forth herein the Guarantee Payments (as defined below) to the
holders of the Preferred Securities, as and when due, regardless of any
defense, right of set-off or counterclaim that the Issuer may have or assert
other than the defense of payment. The following payments with respect to the
Preferred Securities, to the extent not paid by or on behalf of the Issuer
(the "Guarantee Payments"), will be subject to the Guarantee: (i) any accrued
and unpaid distributions required to be paid on the Preferred Securities, if
and only to the extent the Issuer has funds sufficient to make such payment,
(ii) the Redemption Price with respect to any Preferred Securities called for
redemption by the Issuer, if and only to the extent the Issuer has funds
sufficient to make such payment and (iii) upon a voluntary or involuntary
dissolution, winding-up or termination of the Issuer (other than in connection
with a redemption of all of the Preferred Securities), the lesser of (a) the
aggregate Liquidation Amount, to the extent the Issuer has funds sufficient to
make such payment, and (b) the amount of assets of the Issuer remaining
available for distribution to holders of Preferred Securities in liquidation
of the Issuer. Rouse's obligation to make a Guarantee Payment may be satisfied
by direct payment of the required amounts by Rouse to the holders of Preferred
Securities or by causing the Issuer to pay such amounts to such holders.
The Guarantee will be an irrevocable guarantee on a subordinated basis of
the Issuer's obligations under the Preferred Securities, but will apply only
to the extent that the Issuer has funds sufficient to make such payments, and
is not a guarantee of collection. If Rouse does not make interest payments on
the Junior Subordinated Debentures held by the Issuer, it is expected that the
Issuer will not pay distributions on the Preferred Securities. Such interest
payments, if made in accordance with the terms of the Indenture, will provide
sufficient funds to enable the Issuer to make distributions and pay other
amounts on the Preferred Securities. Rouse's obligations under the Guarantee
are subordinated and junior in right of payment to all other liabilities of
Rouse (including the Junior Subordinated Debentures) except any liabilities
that may be made pari passu with or subordinate to the Guarantee expressly by
their terms. See "--Status of the Guarantee".
Rouse has, through the Guarantee, the Trust Agreement, the Junior
Subordinated Debentures, the Indenture and the Expense Agreement, taken
together, fully, irrevocably and unconditionally guaranteed all of the
Issuer's obligations under the Preferred Securities. No single document
standing alone or operating in conjunction with fewer than all of the other
documents constitutes such guarantee. It is only the combined operation of
these documents that has the effect of providing a full, irrevocable and
unconditional guarantee of the Issuer's obligations under the Preferred
Securities. See "Relationship Among the Preferred Securities, the Junior
Subordinated Debentures and the Guarantee--General".
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes that do not adversely affect the rights
of holders of Preferred Securities (in which case no consent of holders of
Preferred Securities will be required), the terms of
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the Guarantee may be changed only with the prior approval of the holders of
not less than a majority in aggregate Liquidation Amount of the outstanding
Preferred Securities. All guarantees and agreements contained in the Guarantee
shall bind the successors, assigns, receivers, trustees and representatives of
Rouse and shall inure to the benefit of the holders of the Preferred
Securities then outstanding.
EVENTS OF DEFAULT
An event of default under the Guarantee will occur upon the failure of Rouse
to perform any of its payment obligations thereunder. The holders of a
majority in aggregate Liquidation Amount of the Preferred Securities have the
right to direct the time, method and place of conducting any proceeding for
any remedy available to the Guarantee Trustee in respect of the Guarantee or
to direct the exercise of any trust or other power conferred upon the
Guarantee Trustee under the Guarantee.
Any holder of Preferred Securities may institute a legal proceeding directly
against Rouse to enforce its rights under such Guarantee without first
instituting a legal proceeding against the Issuer, the Guarantee Trustee or
any other person or entity.
Rouse will be required to provide annually to the Guarantee Trustee a
statement as to the performance by Rouse of certain of its obligations under
the Guarantee and as to any default in such performance. Rouse will also be
required to file annually with the Guarantee Trustee an officer's certificate
as to Rouse's compliance with all conditions under the Guarantee.
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The Guarantee Trustee, other than during the occurrence and continuance of a
default by Rouse in performance of the Guarantee, undertakes to perform only
such duties as are specifically set forth in the Guarantee and, after default
with respect to the Guarantee, must exercise the same degree of care and skill
as a prudent person would exercise or use under the circumstances in the
conduct of his or her own affairs. Subject to this provision, the Guarantee
Trustee is under no obligation to exercise any of the powers vested in it by
the Guarantee at the request of any holder of Preferred Securities unless it
is offered reasonable indemnity against the costs, expenses and liabilities
that might be incurred thereby.
Rouse and certain of its subsidiaries maintain deposit accounts and conduct
other banking transactions with the Guarantee Trustee in the ordinary course
of their businesses.
TERMINATION OF THE GUARANTEE
The Guarantee will terminate and be of no further force and effect upon full
payment of the Redemption Price of all Preferred Securities, the distribution
of Junior Subordinated Debentures to holders of Preferred Securities in
exchange for all of the Preferred Securities or upon payment in full of the
amounts payable upon liquidation of the Issuer. Notwithstanding the foregoing,
the Guarantee will continue to be effective or will be reinstated, as the case
may be, if at any time any holder of Preferred Securities must restore payment
of any sums paid under the Preferred Securities or the Guarantee.
STATUS OF THE GUARANTEE
The Guarantee will constitute an unsecured obligation of Rouse and will rank
(i) subordinate and junior in right of payment to all liabilities of Rouse
(including the Junior Subordinated Debentures but excluding liabilities that
may be made pari passu with or subordinate to the Guarantee expressly by their
terms), and (ii) senior to Rouse's Series A Convertible Preferred Stock,
liquidation value $50.00 per share, and Rouse's common stock. The Trust
Agreement provides that each holder of Preferred
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Securities by acceptance thereof agrees to the subordination provisions and
other terms of the Guarantee. Because Rouse is a holding company whose assets
consist substantially of the stock of its subsidiaries, Rouse's obligations
under the Guarantee are effectively subordinated to the claims of the direct
creditors of its subsidiaries. See "Risk Factors--Subordination of Guarantee
and Junior Subordinated Debentures; Limited Preference Rights of Preferred
Securities".
The Guarantee will constitute a guarantee of payment and not of collection
(i.e., the guaranteed party may institute a legal proceeding directly against
the Guarantor to enforce its rights under the Guarantee without first
instituting a legal proceeding against any other person or entity).
GOVERNING LAW
The Guarantee will be governed by and construed in accordance with the laws
of the State of New York.
THE EXPENSE AGREEMENT
Pursuant to the Expense Agreement entered into by Rouse under the Trust
Agreement (the "Expense Agreement"), Rouse will irrevocably and
unconditionally guarantee to each person or entity to whom the Issuer becomes
indebted or liable, the full payment of any indebtedness, expenses or
liabilities of the Issuer, other than obligations of the Issuer to pay to the
holders of any Common Securities being held by Rouse or Preferred Securities
being issued pursuant to this Prospectus the amounts due such holders pursuant
to the terms of such Issuer Securities.
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DESCRIPTION OF THE JUNIOR SUBORDINATED DEBENTURES
Set forth below is a description of the specific terms of the Junior
Subordinated Debentures which the Issuer will purchase with the proceeds of
the issuance and sale of the Common Securities and the Preferred Securities.
The following description contains all material information concerning the
Junior Subordinated Debentures but does not purport to be complete and is
qualified in its entirety by reference to the description in the Indenture
(the "Indenture"), dated as of , 1995, between Rouse and The First National
Bank of Chicago, as trustee with respect to the Junior Subordinated Debentures
(the "Debenture Trustee"), which is filed as an exhibit to the Registration
Statement of which this Prospectus forms a part, and the Trust Indenture Act.
Whenever particular sections or defined terms in the Indenture are referred to
herein, such sections or defined terms are incorporated by reference herein.
Section references used herein are references to provisions of the Indenture
unless otherwise noted.
GENERAL
The Junior Subordinated Debentures will be limited in aggregate principal
amount to $103.1 million ($118.6 million if the over-allotment option is
exercised), such amount being the sum of the aggregate stated liquidation
amounts of the Preferred Securities and the Common Securities. The Junior
Subordinated Debentures will be unsecured, subordinated obligations of Rouse
which will rank junior to all of Rouse's Senior Indebtedness (as defined in
"--Subordination"). (Section 1101).
The entire outstanding principal amount of the Junior Subordinated
Debentures will become due and payable, together with any accrued and unpaid
interest thereon, including any Additional Interest (as defined in "--
Additional Interest"), on , 2025.
Payments by Rouse on the Junior Subordinated Debentures, if made in
accordance with the terms of the Indenture, will provide funds sufficient to
enable the Issuer to make distributions and pay other amounts on the Preferred
Securities. See "Relationship Among the Preferred Securities, the Junior
Subordinated Debentures and the Guarantee -- General".
OPTIONAL REDEMPTION
On or after , 2000 Rouse will have the right, at any time and from
time to time, to redeem the Junior Subordinated Debentures, in whole or in
part, with the proceeds of one or more Equity Issuances, at a cash redemption
price equal to 100% of the principal amount of the Junior Subordinated
Debentures being redeemed, together with any accrued and unpaid interest
thereon, including any Additional Interest, to the redemption date.
If a Tax Event shall occur and be continuing, Rouse shall have the right to
(i) redeem the Junior Subordinated Debentures, in whole but not in part, at a
redemption price equal to 100% of the principal amount of Junior Subordinated
Debentures then outstanding plus any accrued and unpaid interest, including
any Additional Interest, to the redemption date, (ii) direct the Trustees to
distribute a Like Amount of Junior Subordinated Debentures to each holder of a
Preferred Security or (iii) cause the Preferred Securities to remain
outstanding and pay Additional Interest Attributable to Taxes on the Junior
Subordinated Debentures, provided, in the case of clause (ii), that the Trust
shall have received an opinion of counsel to the effect that the holders of
the Preferred Securities will not recognize any gain or loss for United States
federal income tax purposes as a result of such distribution. (Section 1201).
For so long as the Issuer is the holder of all the outstanding Junior
Subordinated Debentures, the proceeds of any such redemption will be used by
the Issuer to redeem Preferred Securities and the Common Securities in
accordance with their terms. Rouse may not redeem the Junior Subordinated
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Debentures in part unless all accrued and unpaid interest (including any
Additional Interest) has been paid in full on all outstanding Junior
Subordinated Debentures for all quarterly interest periods terminating on or
prior to the date of redemption and no Extension Period is in effect. (Section
1201).
Any optional redemption of the Junior Subordinated Debentures shall be made
upon not less than 30 nor more than 60 days' notice to the holders thereof, as
provided in the Indenture. (Section 1205).
INTEREST
The Junior Subordinated Debentures shall bear interest at the rate of %
per annum from the date of original issuance. Such interest is payable
quarterly in arrears on March 31, June 30, September 30 and December 31 of
each year (each, an "Interest Payment Date"), commencing December 31, 1995, to
the person in whose name each Junior Subordinated Debenture is registered,
subject to certain exceptions, at the close of business on the Business Day
next preceding such Interest Payment Date. It is anticipated that the Junior
Subordinated Debentures will be in the name of the Trust and will be held by
the Property Trustee for the benefit of the holders of the Issuer Securities.
The amount of interest payable for any period will be computed on the basis
of a 360-day year of twelve 30-day months. (Section 310). In the event that
any date on which interest is payable on the Junior Subordinated Debentures is
not a Business Day, then payment of the interest payable on such date will be
made on the next succeeding day which is a Business Day (and without any
interest or other payment in respect of any such delay), except that, if such
Business Day is in the next succeeding calendar year, such payment shall be
made on the immediately preceding Business Day, in each case with the same
force and effect as if made on the date the payment was originally payable.
OPTION TO EXTEND INTEREST PAYMENT PERIOD
Rouse shall have the right at any time during the term of the Junior
Subordinated Debentures to extend the interest payment period from time to
time to a period of up to 20 consecutive quarters (each, an "Extension
Period"), during which periods interest will compound quarterly and Rouse
shall have the right to make partial payments of interest on any Interest
Payment Date. At the end of any such Extension Period, Rouse must pay all
interest then accrued and unpaid together with Additional Interest (as defined
under "--Additional Interest"). However, during any such Extension Period,
Rouse may not declare or pay any dividend or distribution (other than a
dividend or distribution in common stock of Rouse or other security junior in
right of payment to the Junior Subordinated Debentures) on, or redeem,
purchase, acquire or make a liquidation payment with respect to, any of its
capital stock, or make any guarantee payments with respect to the foregoing
(other than payments under the Guarantee) or repurchase, or cause any
subsidiary to repurchase any security of Rouse ranking pari passu with or
subordinate to the Junior Subordinated Debentures (except on a ratable basis
with any securities ranking pari passu with the Junior Subordinated
Debentures). Prior to the termination of any such Extension Period, Rouse may
further extend the interest payment period, provided that such Extension
Period together with all such previous and further extensions thereof may not
exceed 20 consecutive quarters or extend beyond the maturity date of the
Junior Subordinated Debentures. Upon the termination of any such Extension
Period and the payment of all amounts then due, Rouse may select a new
Extension Period, subject to the foregoing requirements. Except for Additional
Interest Attributable to Taxes (as defined under "--Additional Interest"), no
interest shall be due and payable during an Extension Period, except at the
end thereof. So long as the Property Trustee shall be the sole holder of
record of the Junior Subordinated Debentures, Rouse must give the Property
Trustee, the Administrative Trustees and the Debenture Trustee notice of its
selection of such Extension Period at least ten Business Days prior to the
earlier of (i) the date the distributions on the Preferred Securities are
payable or (ii) the date the Administrative Trustees are required to give
notice to the New York Stock Exchange or other applicable self-regulatory
organization or to holders of the Preferred Securities of the record date for
the payment of such distribution or the date such
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distributions are payable, but in any event not less than two Business Days
prior to such record date. The Debenture Trustee will be required to give
notice of Rouse's selection of such Extension Period to the holders of the
Preferred Securities. If the Property Trustee shall not be the sole holder of
record of the Junior Subordinated Debentures, Rouse shall give the holders of
the Junior Subordinated Debentures notice of its selection of such Extension
Period ten Business Days prior to the earlier of (i) the Interest Payment Date
or (ii) the date Rouse is required to give notice to the New York Stock
Exchange or other applicable self-regulatory organization, or to holders of
the Junior Subordinated Debentures, of the record or payment date of such
related interest payment, but in any event not less than two Business Days
prior to such record date. (Section 301).
ADDITIONAL INTEREST
If at any time the Issuer shall be required to pay any interest on
distributions in arrears in respect of the Preferred Securities pursuant to
the terms thereof, Rouse will pay as interest to the Issuer as the holder of
the Junior Subordinated Debentures an amount of additional interest
("Additional Interest Attributable to Deferral") equal to such interest on
distributions in arrears. Accordingly, in such circumstances Rouse will, to
the fullest extent permitted by applicable law, pay interest upon interest in
order to provide for quarterly compounding on the Junior Subordinated
Debentures. In addition, if the Issuer would be required to pay any taxes,
duties, assessments or governmental charges of whatever nature (other than
withholding taxes) imposed by the United States or any other taxing authority,
then, in any such case, Rouse will also pay such amounts as shall be required
so that the net amounts received and retained by the Issuer after paying such
taxes, duties, assessments or governmental charges will be not less than the
amounts the Issuer would have received had no such taxes, duties, assessments
or governmental charges been imposed ("Additional Interest Attributable to
Taxes" and together with Additional Interest Attributable to Deferral,
"Additional Interest").
SET-OFF
Notwithstanding anything to the contrary in the Indenture, Rouse shall have
the right to set-off any payment it is otherwise required to make thereunder
to the extent Rouse has theretofore made, or is concurrently on the date of
such payment making, a payment under the Guarantee. (Section 311).
SUBORDINATION
The Junior Subordinated Debentures are subordinated in right of payment to
the prior payment in full in cash or cash equivalents of all Senior
Indebtedness (as defined herein). (Sections 101 and 1101). In the event of:
(a) any insolvency or bankruptcy case or proceeding, or any receivership,
liquidation, reorganization or other similar case or proceeding in connection
therewith, relative to Rouse or to its creditors, as such, or to its assets,
(b) any liquidation, dissolution or other winding up of Rouse, whether
voluntary or involuntary and whether or not involving insolvency or bankruptcy
or (c) any assignment for the benefit of creditors or any other marshaling of
assets and liabilities of Rouse (except a distribution in connection with a
consolidation of Rouse with, or the merger of Rouse into, another entity or
the liquidation or dissolution of Rouse following conveyance, transfer or
lease of its properties and assets substantially as an entirety to another
entity upon the terms and conditions described below under "--Consolidation,
Merger and Sale"), the holders of all Senior Indebtedness will be entitled to
receive payment in full in cash or cash equivalents of all amounts due or to
become due thereon, before the holders of Junior Subordinated Debentures are
entitled to receive any payment on account of principal of or interest on the
Junior Subordinated Debentures; and any payment or distribution of assets of
Rouse of any kind or character, whether in cash, property or securities, by
set-off or otherwise, to which the holders of the Junior Subordinated
Debentures or the Debenture Trustee would be entitled but for the provisions
of the Indenture relating to subordination (excluding certain permitted
subordinated securities) shall be paid by the trustee in bankruptcy, receiver,
liquidating trustee, custodian, assignee, agent or other person making such
payment or distribution directly to the
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holders of Senior Indebtedness ratably according to the aggregate amounts
remaining unpaid on account of the Senior Indebtedness to the extent necessary
to make payment in full in cash or cash equivalents of all Senior Indebtedness
remaining unpaid. In the event that, notwithstanding the foregoing, the
Debenture Trustee or any holder of the Junior Subordinated Debentures shall
have received payment or distribution of assets of Rouse of any kind or
character (excluding certain permitted subordinated securities) before all
Senior Indebtedness is paid in full or payment thereof provided for, then such
payment or distribution shall be paid over or delivered to the trustee in
bankruptcy, receiver, liquidating trustee, custodian, assignee, agent or other
person making payment or distribution of assets of Rouse for application to
the payment of all Senior Indebtedness remaining unpaid to the extent
necessary to pay all Senior Indebtedness in full in cash or cash equivalents.
(Section 1102).
As of September 30, 1995, the Senior Indebtedness of Rouse was approximately
$541 million. As a holding company, substantially all of Rouse's assets
consist of the stock of its subsidiaries. Except to the extent that Rouse may
itself be a creditor with recognized claims against Rouse's subsidiaries, the
claims of the holders of the Junior Subordinated Debentures to assets of
subsidiaries of Rouse effectively are subordinated to the claims of direct
creditors of the subsidiaries of Rouse. At September 30, 1995, Rouse's
subsidiaries had $2,077 million of indebtedness outstanding for money borrowed
and capitalized lease obligations.
The term "Senior Indebtedness" shall mean the principal of, premium, if any,
interest on and any other payment due pursuant to any of the following,
whether outstanding at the date of execution of the Indenture or thereafter
incurred, created or assumed:
(a) all indebtedness of Rouse (other than any obligations to trade
creditors) evidenced by notes, debentures, bonds or other securities sold
by Rouse for money borrowed and capitalized lease obligations of Rouse that
would be capitalized on a balance sheet of Rouse prepared in accordance
with generally accepted accounting principles;
(b) all indebtedness of others of the kinds described in the preceding
clause (a) with an express written obligation of Rouse to repay the
principal or other amount of the debt during the full term of the
indebtedness; and
(c) all renewals, extensions or refundings of indebtedness of the kinds
described in either of the preceding clauses (a) or (b),
unless, in the case of any particular indebtedness, lease obligation,
guarantee, renewal, extension or refunding, the instrument creating or
evidencing the same or the assumption or guarantee of the same expressly
provides that such indebtedness, lease obligation, renewal, extension or
refunding is expressly made pari passu with or subordinate to the Junior
Subordinated Debentures. (Section 101).
The Indenture does not limit the aggregate amount of Senior Indebtedness or
subsidiary indebtedness that may be incurred.
CERTAIN COVENANTS OF ROUSE
Pursuant to the Indenture, Rouse will covenant that it will not declare or
pay any dividend or distribution (other than a dividend or distribution in
common stock of Rouse or other security junior in right of payment to the
Junior Subordinated Debentures) on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of its capital stock, or make any
guarantee payments with respect to the foregoing (other than payments under
the Guarantee), or repurchase, or cause any of its subsidiaries to repurchase,
any security of Rouse ranking pari passu with or subordinate to the Junior
Subordinated Debentures (except on a ratable basis with any securities ranking
pari passu with the Junior Subordinated Debentures) if at such time (i) there
shall have occurred any event of which Rouse has actual knowledge that (a)
with the giving of notice or the lapse of time, or both, would constitute an
Event of Default under the Indenture and (b) in respect of which Rouse shall
not have
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taken reasonable steps to cure, (ii) Rouse shall be in default with respect to
its payment of any obligations under the Guarantee or (iii) Rouse shall have
given notice of its selection of an Extension Period as provided in the
Indenture (which notice shall not have been rescinded) and such Extension
Period, or any extension thereof, shall have commenced and be continuing.
Rouse will also covenant (i) to maintain 100% ownership of the Common
Securities of the Issuer, (ii) not to voluntarily dissolve, wind-up or
terminate the Issuer, except in certain circumstances permitted by the Trust
Agreement and (iii) to use its reasonable efforts, consistent with the terms
and provisions of the Trust Agreement, to cause the Issuer to remain a
business trust and otherwise not to be classified as an association taxable as
a corporation for United States federal income tax purposes. "Subsidiary" is
defined to mean "any Person a majority of the equity ownership or the voting
stock of which is at the time owned, directly or indirectly, by the Company or
by one or more other Subsidiaries or by the Company and one or more other
Subsidiaries." (Section 1005).
EVENTS OF DEFAULT
The Indenture provides that any one or more of the following described
events that has occurred and is continuing constitutes an "Event of Default"
with respect to the Junior Subordinated Debentures:
(a) failure for 30 days to pay any interest on the Junior Subordinated
Debentures, including any Additional Interest in respect thereof, when due
(subject to the deferral of any due date in the case of an Extension
Period); or
(b) failure to pay any principal on the Junior Subordinated Debentures
when due, whether at maturity, upon redemption by declaration or otherwise;
or
(c) failure to observe or perform in any material respect any other
covenant contained in the Indenture for 90 days after written notice to
Rouse from the Debenture Trustee or the holders of at least 25% in
principal amount of the outstanding Junior Subordinated Debentures; or
(d) certain events in bankruptcy, insolvency or reorganization of Rouse.
(Section 501).
The holders of a majority in outstanding principal amount of the Junior
Subordinated Debentures have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Debenture Trustee.
(Section 512). The Debenture Trustee, the holders of at least 25% in aggregate
outstanding principal amount of the Junior Subordinated Debentures or the
holders of at least 25% in aggregate Liquidation Amount of outstanding
Preferred Securities may declare the principal and interest, including
Additional Interest, due and payable immediately upon an Event of Default. The
holders of a majority in aggregate outstanding principal amount of the Junior
Subordinated Debentures may annul such declaration and waive the default if
the default has been cured or waived and a sum sufficient to pay all matured
installments of interest and principal due otherwise than by acceleration and
any Additional Interest has been deposited with the Debenture Trustee.
(Section 502).
A holder of Preferred Securities may directly institute a proceeding for
enforcement of payment to such holder directly of the principal of or interest
on Junior Subordinated Debentures having a principal amount equal to the
aggregate Liquidation Amount of the Preferred Securities of such holder on or
after the respective due dates specified in the Junior Subordinated
Debentures. The holders of the Preferred Securities would not be able to
exercise directly any other remedies available to the holder of the Junior
Subordinated Debentures unless the Property Trustee or the Debenture Trustee,
acting for the benefit of the Property Trustee, fails to do so. In such event,
the holders of at least 25% in aggregate Liquidation Amount of the outstanding
Preferred Securities would have such right to institute proceedings.
The holders of a majority in outstanding principal amount of the Junior
Subordinated Debentures affected thereby may, on behalf of the holders of all
the Junior Subordinated Debentures, waive any past default, except a default
in the payment of principal or interest, including Additional Interest
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(unless such default has been cured and a sum sufficient to pay all matured
installments of interest and principal due otherwise than by acceleration and
any Additional Interest has been deposited with the Debenture Trustee) or a
default in respect of a covenant or provision which under the Indenture cannot
be modified or amended without the consent of the holder of each outstanding
Junior Subordinated Debenture. (Section 513). Rouse is required to file
annually with the Debenture Trustee a certificate as to whether or not Rouse
is in compliance with all the conditions and covenants applicable to it under
the Indenture. (Section 1004).
In case any Event of Default shall occur and be continuing, the Property
Trustee will have the right to declare the principal of and the interest on
the Junior Subordinated Debentures (including any Additional Interest) and any
other amounts payable under the Indenture to be forthwith due and payable and
to enforce its other rights as a creditor with respect to the Junior
Subordinated Debentures. (Section 502).
An involuntary dissolution of the Issuer prior to redemption or maturity of
the Junior Subordinated Debentures would not constitute an Event of Default
with respect to the Junior Subordinated Debentures. If the Issuer is
dissolved, any of the following, among other things, could occur: (i) a
distribution of the Junior Subordinated Debentures to the holders of the
Preferred Securities after satisfaction of liabilities to creditors of the
Trust, (ii) a cash distribution to the holders of the Preferred Securities out
of the sale of assets of the Issuer, after satisfaction of liabilities to
creditors of the Trust or (iii) a permitted redemption at par of the Junior
Subordinated Debentures, and a consequent redemption of a Like Amount of the
Preferred Securities, at the option of Rouse under the circumstances described
under "--Optional Redemption".
FORM, EXCHANGE, AND TRANSFER
The Junior Subordinated Debentures will be issuable only in registered form,
without coupons and only in denominations of $25 and integral multiples
thereof. (Section 302).
The Junior Subordinated Debentures, if distributed to holders of Preferred
Securities pursuant to the dissolution of the Issuer, will initially be issued
as a registered security in global form (a "Global Security"). In the event
that Junior Subordinated Debentures are issued in certificated form, such
Junior Subordinated Debentures will be in denominations of $25 and integral
multiples thereof and may be transferred or exchanged at the offices described
below.
Subject to the terms of the Indenture, Junior Subordinated Debentures may be
presented for registration of transfer or exchange (duly endorsed or
accompanied by satisfactory instruments of transfer) at the office of the
security registrar of the Junior Subordinated Debentures (the "Debenture
Registrar") or at the office of any transfer agent designated by Rouse for
such purpose. No service charge will be made for any registration of transfer
or exchange of Junior Subordinated Debentures, but, in the case of a transfer,
Rouse may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith. Such transfer or exchange
will be effected when the Debenture Registrar or such transfer agent, as the
case may be, is satisfied with the documents of transfer, title and identity
of the person making the request. Rouse has appointed the Debenture Trustee as
the initial Debenture Registrar. (Section 305). Rouse may at any time
designate additional transfer agents or rescind the designation of any
transfer agent or approve a change in the office through which any transfer
agent acts. (Section 1002).
If the Junior Subordinated Debentures are to be redeemed in part, Rouse will
not be required to issue, register the transfer of or exchange any Junior
Subordinated Debentures during a period beginning at the opening of business
15 days before the day of mailing of a notice of redemption of any such Junior
Subordinated Debentures that may be selected for redemption and ending at the
close of business on the day of such mailing, except the unredeemed portion of
any such Junior Subordinated Debentures being redeemed in part. (Section 305).
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PAYMENT AND PAYING AGENTS
Payment of interest on a Junior Subordinated Debenture on any Interest
Payment Date will be made to the person in whose name such Junior Subordinated
Debenture (or one or more predecessor securities) is registered at the close
of business on the Regular Record Date (as defined in the Indenture) for such
interest. (Section 307). Payments on Junior Subordinated Debentures issued as
a Global Security will be made to DTC, as the depository for the Junior
Subordinated Debentures.
Principal of and any interest (including Additional Interest) on the Junior
Subordinated Debentures will be payable at the office of such paying agent or
paying agents (the "Debenture Paying Agent") as Rouse may designate for such
purpose from time to time, except that at the option of Rouse payment of any
interest may be made by check mailed to the address of the person entitled
thereto as such address appears in the Security Register or by wire transfer
(Section 301). The corporate trust office of the Debenture Trustee in The City
of New York is designated as Rouse's sole Debenture Paying Agent for payments
with respect to the Junior Subordinated Debentures. Rouse may at any time
designate additional Debenture Paying Agents or rescind the designation of any
Debenture Paying Agent or approve a change in the office through which any
Paying Agent acts. (Section 1002).
INFORMATION CONCERNING THE DEBENTURE TRUSTEE
The Debenture Trustee, other than during the occurrence and continuance of a
default by Rouse in performance of the Indenture, undertakes to perform only
such duties as are specifically set forth in the Indenture and, after an Event
of Default under the Indenture, must exercise the same degree of care and
skill as a prudent person would exercise or use under the circumstances in the
conduct of his or her own affairs. Subject to this provision, the Debenture
Trustee is under no obligation to exercise any of the powers vested in it by
the Indenture at the request of any holder of Preferred Securities or Junior
Subordinated Debentures unless it is offered reasonable indemnity against the
costs, expenses and liabilities that might be incurred thereby. (Section 603).
Rouse and certain of its subsidiaries maintain deposit accounts and conduct
other banking transactions with the Debenture Trustee in the ordinary course
of their businesses.
MODIFICATION OF THE INDENTURE
From time to time, Rouse and the Debenture Trustee may, without the consent
of the holders of the Junior Subordinated Debentures, amend, waive or
supplement the Indenture for specified purposes of evidencing the succession
of another person to Rouse and the assumption by such successor of Rouse's
obligations under the Indenture and on the Junior Subordinated Debentures,
adding to the covenants of Rouse for the benefit of the holders of the Junior
Subordinated Debentures or surrendering any right or power conferred upon
Rouse by the Indenture or the Junior Subordinated Debentures, evidencing and
providing the acceptance of the appointment of a successor Debenture Trustee,
curing ambiguities, defects or inconsistencies, qualifying, or maintaining the
qualification of, the Indenture under the Trust Indenture Act, or making any
other change that does not adversely affect the rights of any holder of Junior
Subordinated Debentures (Section 901). The Indenture contains provisions
permitting Rouse and the Debenture Trustee, with the consent of the holders of
not less than a majority in principal amount of the outstanding Junior
Subordinated Debentures, to modify the indenture in a manner affecting the
rights of the holders of the Junior Subordinated Debentures; provided that no
such modification may, without the consent of the holder of each outstanding
Junior Subordinated Debenture, (i) change the fixed maturity of the Junior
Subordinated Debentures, or reduce the principal amount thereof, or reduce the
rate or extend the time of payment of interest thereon, (ii) change the place
or currency of payment of principal or interest on the Junior Subordinated
Debentures, (iii) change the subordination provisions in a manner adverse to
the holders of the Junior Subordinated Debentures or the Preferred Securities,
(iv) change the date on which the Junior Subordinated Debentures may be
redeemed at the option of Rouse to an earlier date, (v) reduce the percentage
of principal amount of Junior Subordinated Debentures, the holders of which
are required to consent to any such modification of the Indenture or (vi)
modify certain provisions of the Indenture
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relating to the waiver of past defaults or compliance by Rouse with the
covenants therein. The Indenture also requires the consent of the holders of
the Preferred Securities in respect of certain amendments to or termination of
the Indenture and with respect to compliance by Rouse with certain covenants
in the Indenture. (Sections 901 and 902).
CONSOLIDATION, MERGER AND SALE
Rouse may not consolidate with or merge into or convey, transfer or lease
its properties and assets substantially as an entirety to any person (a
"Successor Person"), and may not permit any person to merge into, or convey,
transfer or lease its properties and assets substantially as an entirety to
Rouse, unless: (i) the Successor Person (if any) is a corporation, partnership
or trust organized and validly existing under the laws of any domestic
jurisdiction, and assumes Rouse's obligations on the Junior Subordinated
Debentures, the Indenture, the Trust Agreement, the Guarantee and the Expense
Agreement; (ii) immediately after giving effect to the transaction and
treating any indebtedness which becomes an obligation of Rouse or any
subsidiary as a result of the transaction as having been incurred by it or any
Subsidiary at the time of the transaction, no Event of Default, and no event
which, after notice or lapse of time, would become an Event of Default, shall
have occurred and be continuing; (iii) such transaction does not give rise to
any breach or violation of the Trust Agreement or the Guarantee; and (iv)
certain other conditions are met. (Section 801).
SATISFACTION AND DISCHARGE
Under the terms of the Indenture, Rouse will be discharged from any and all
obligations in respect of the Junior Subordinated Debentures (except in each
case for certain obligations to register the transfer or exchange of Junior
Subordinated Debentures, pay Additional Interest Attributable to Taxes,
compensate, indemnify and reimburse the Debenture Trustee, replace stolen,
lost or mutilated Junior Subordinated Debentures and hold moneys for payment
in trust) if all authenticated and delivered Junior Subordinated Debentures
(other than certain stolen, lost, or mutilated Junior Subordinated Debentures
and Junior Subordinated Debentures for which payment money was segregated and
then discharged) have been delivered to the Debenture Trustee for cancellation
or if Rouse deposits with the Debenture Trustee, in trust, moneys in an amount
sufficient to pay all the principal of, and interest on, the Junior
Subordinated Debentures on the dates such payments are due in accordance with
the terms of the Junior Subordinated Debentures. (Section 401).
GOVERNING LAW
The Indenture and the Junior Subordinated Debentures will be governed by,
and construed in accordance with, the laws of the State of New York. (Section
112).
MISCELLANEOUS
All covenants and agreements of Rouse contained in the Indenture will bind
its successors and assigns. (Section 109).
RELATIONSHIP AMONG THE PREFERRED SECURITIES,
THE JUNIOR SUBORDINATED DEBENTURES AND THE GUARANTEE
GENERAL
As long as payments of interest and other payments are made when due on the
Junior Subordinated Debentures, such payments will be sufficient to cover
distributions and other payments due on the Preferred Securities, primarily
because (i) the aggregate principal amount of Junior Subordinated Debentures
will be equal to the sum of the aggregate stated liquidation amount of the
Preferred Securities and the Common Securities; (ii) the interest rate and
interest and other payment dates on the Junior Subordinated Debentures will
match the distribution rate and distribution and other payment dates for the
Preferred Securities; (iii) the Expense Agreement entered into by Rouse
pursuant to the Trust Agreement provides that Rouse shall pay for all, and the
Issuer shall not be obligated to pay, directly or indirectly, for any costs,
expenses and liabilities of the Issuer, including any income taxes, duties and
other governmental charges, and all costs and expenses with respect
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thereto, to which the Issuer may become subject, except for United States
withholding taxes and the lssuer's obligations to holders of the Preferred
Securities under the Trust Agreement and the Preferred Securities; and (iv) the
Trust Agreement further provides that the Trustees shall not cause or permit the
Issuer to, among other things, engage in any activity that is not consistent
with the limited purposes of the Issuer.
Taken together, Rouse's obligations under the Junior Subordinated
Debentures, the Indenture, the Trust Agreement, the Expense Agreement, and the
Guarantee provide a full, irrevocable and unconditional guarantee of payments
of distributions and other amounts due on the Preferred Securities. No single
document standing alone or operating in conjunction with fewer than all of the
other documents constitutes such guarantee. It is only the combined operation
of these documents that has the effect of providing a full, irrevocable and
unconditional guarantee of the Issuer's obligations under the Preferred
Securities. If and to the extent that Rouse does not make payments on the
Junior Subordinated Debentures, the Issuer will not pay distributions or other
amounts due on the Preferred Securities.
A holder of a Preferred Security may institute a legal proceeding directly
against Rouse to enforce its rights under the Guarantee without first
instituting a legal proceeding against the Issuer or any other person or
entity.
The Preferred Securities evidence the rights of the holders thereof to the
assets of the Issuer, a trust that exists for the sole purpose of issuing the
Issuer Securities and investing the proceeds thereof in debt securities of
Rouse, while the Junior Subordinated Debentures represent indebtedness of
Rouse. A principal difference between the rights of a holder of a Preferred
Security and a holder of a Junior Subordinated Debenture is that a holder of a
Junior Subordinated Debenture will accrue, and (subject to the permissible
extension of any interest payment period) is entitled to receive, interest on
the principal amount of Junior Subordinated Debentures held, while a holder of
Preferred Securities is only entitled to receive distributions if and to the
extent the Issuer has funds sufficient for the payment of such distributions.
Should an Event of Default under the Indenture occur and be continuing, the
holders of at least 25% in aggregate Liquidation Amount of the outstanding
Preferred Securities may accelerate the maturity of the Junior Subordinated
Debentures. A holder of Preferred Securities may directly institute a
proceeding for enforcement of payment to such holder directly of the principal
of or interest on Junior Subordinated Debentures having a principal amount
equal to the aggregate Liquidation Amount of the Preferred Securities of such
holder on or after the respective due dates specified in the Junior
Subordinated Debentures. The holders of the Preferred Securities would not be
able to exercise directly any other remedies available to the holder of the
Junior Subordinated Debentures unless the Property Trustee or the Debenture
Trustee, acting for the benefit of the Property Trustee, fails to do so. In
such event, the holders of at least 25% in aggregate Liquidation Amount of the
outstanding Preferred Securities would have such right to institute
proceedings. At any time, the holders of a majority of the aggregate
Liquidation Amount of the outstanding Preferred Securities may direct the
Property Trustee to enforce rights of the holders of the Junior Subordinated
Debentures under the Indenture. In addition, holders of Preferred Securities
may institute a legal proceeding directly against Rouse to enforce their
rights under the Guarantee.
If an early termination event (as described in "Description of the Preferred
Securities--Liquidation Distribution Upon Dissolution") with respect to the
Trust occurs, thereby giving rise to the dissolution and liquidation of the
Trust, any of the following, among other things, could occur: (i) a
distribution of the Junior Subordinated Debentures to the holders of the
Preferred Securities after satisfaction of liabilities to creditors of the
Trust, (ii) a cash distribution to the holders of the Preferred Securities out
of the sale of assets of the Issuer, after satisfaction of liabilities to
creditors of the Trust or (iii) a permitted redemption at par of the Junior
Subordinated Debentures, and a consequent redemption of a Like Amount of the
Preferred Securities, at the option of Rouse under the circumstances described
under "Description of the Junior Subordinated Debentures--Optional
Redemption". If the Junior
62
<PAGE>
Subordinated Debentures are distributed, the holders will be able to exercise
directly rights of the holders of Junior Subordinated Debentures under the
Indenture.
Upon any voluntary or involuntary dissolution, winding-up or termination of
the Issuer, the holders of Preferred Securities will be entitled to receive,
out of assets available for distribution to holders, the Liquidation
Distribution in cash or Junior Subordinated Debentures. See "Description of
the Preferred Securities--Liquidation Distribution Upon Dissolution". Upon any
voluntary or involuntary liquidation or bankruptcy of Rouse, the holders of
Junior Subordinated Debentures would be subordinated creditors of Rouse,
subordinated in right payment to all Senior Indebtedness, but entitled to
receive payment in full of principal, premium, if any, and interest, before
any stockholders of Rouse receive payments or distributions. Since Rouse is
the Guarantor under the Guarantee and has agreed as Depositor to pay for all
costs, expenses and liabilities of the Issuer (other than United States
withholding taxes and other than the Issuer's obligations to Preferred
Security holders under the Trust Agreement and the Preferred Securities), the
positions of a holder of Preferred Securities and a holder of Junior
Subordinated Debentures relative to other creditors and to stockholders of
Rouse in the event of liquidation or bankruptcy of Rouse would be
substantially the same.
A default or event of default under any Senior Indebtedness would not
constitute a default or Event of Default under the Junior Subordinated
Debentures. Subject to Rouse's right to extend an interest payment period from
time to time for up to 20 consecutive quarters, failure to make required
payments on the Junior Subordinated Debentures would constitute an Event of
Default under the Indenture.
ACCOUNTING TREATMENT
For financial reporting purposes, the Trust will be treated as a subsidiary
of Rouse and, accordingly, the accounts of the Trust will be included in the
consolidated financial statements of Rouse. The Preferred Securities will be
presented as a separate line item in the consolidated balance sheet of Rouse
entitled "Company-obligated mandatorily redeemable Preferred Securities of
subsidiary Trust holding solely Company Subordinated Debt Securities", and
appropriate disclosures about the Preferred Securities, the Guarantee and the
Junior Subordinated Debentures will be included in the notes to the
consolidated financial statements. See "Capitalization". For financial
reporting purposes, Rouse will record distributions payable on the Preferred
Securities as operating expenses.
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
GENERAL
This discussion is a summary of the principal United States federal income
tax considerations that may be relevant to prospective purchasers of Preferred
Securities and represents the opinion of Fried, Frank, Harris, Shriver &
Jacobson (a partnership including professional corporations), special counsel
to Rouse and the Issuer, insofar as it relates to matters of law and legal
conclusions with respect thereto. This discussion is based upon current
provisions of the Internal Revenue Code of 1986, as amended (the "Code"),
existing and proposed Treasury Regulations thereunder and current
administrative rulings and court decisions, all of which are subject to
change, possibly retroactively. Subsequent changes may cause tax consequences
to vary substantially from the consequences described below.
This discussion is limited to the United States federal income tax
consequences to persons who purchase Preferred Securities at original issue
for their initial offering price who are "United States Persons" (as defined
below), and who hold the Preferred Securities as "capital assets" within the
meaning of Section 1221 of the Code. This summary does not address all aspects
of United States federal income taxation that may be applicable to a
particular holder of Preferred Securities (a "Holder") in light of such
Holder's particular circumstances, or to certain types of Holders that may be
subject to special treatment under the United States federal income tax laws
(e.g., S corporations, banks, insurance companies, tax-exempt organizations,
dealers in securities or currencies, taxpayers
63
<PAGE>
subject to the alternative minimum tax, Holders that will hold Preferred
Securities as part of a position in a "straddle" or as part of a "hedging" or
"conversion" transaction for United States federal income tax purposes, or
Holders who have a "functional currency" other than the United States dollar),
and does not discuss any aspects of state, local or foreign tax laws or any
estate or gift tax considerations. Accordingly, each prospective Holder of
Preferred Securities should consult such Holder's own tax advisor in analyzing
the United States federal, state, local and foreign tax consequences of the
purchase, ownership and disposition of Preferred Securities. As used herein,
the term "United States Person" means a citizen or resident of the United
States, a corporation or partnership created or organized under the laws of
the United States or any political subdivision thereof or therein, or any
estate or trust the income of which is subject to United States federal income
taxation regardless of its source.
INCOME FROM PREFERRED SECURITIES
The Issuer will not be classified as an association taxable as a corporation
for United States federal income tax purposes. Each Holder will be treated as
owning an undivided beneficial interest in the Junior Subordinated Debentures.
Accordingly, each Holder will be required to include in such Holder's gross
income such Holder's share of the interest income accrued with respect to the
Junior Subordinated Debentures whether or not actually distributed to the
Holder.
SALES OF PREFERRED SECURITIES
A Holder will generally recognize gain or loss on the sale or other taxable
disposition of a Preferred Security, including a redemption for cash, equal to
the difference (if any) between the amount realized from such sale or other
taxable disposition and the Holder's adjusted tax basis in the Preferred
Security. A Holder's adjusted tax basis in a Preferred Security generally will
equal the issue price of such Preferred Security increased by the amount of
original issue discount previously includible in the gross income of such
Holder, and decreased by the amount of any payments received on such Preferred
Security. Any gain or loss recognized by a Holder on the sale of a Preferred
Security held for more than one year generally will be taxable as long-term
capital gain or loss, and otherwise will be short-term capital gain or loss.
Under current law, net long-term capital gains of individuals may be taxed at
lower rates than items of ordinary income. The deductibility of capital losses
is subject to limitations.
POTENTIAL EXTENSION OF INTEREST PAYMENT PERIOD AND ORIGINAL ISSUE DISCOUNT
Under the Indenture, and as described under "Description of the Junior
Subordinated Debentures--Option to Extend Interest Payment Period", Rouse has
the option to extend, from time to time, the interest payment period on the
Junior Subordinated Debentures to a period not exceeding 20 consecutive
quarters, but not beyond the maturity date of the Junior Subordinated
Debentures. Rouse's option to extend the interest payment period will cause
the Junior Subordinated Debentures to be treated as issued with "original
issue discount" for United States federal income tax purposes. Accordingly, a
Holder will recognize interest income (i.e., original issue discount) under a
constant yield basis over the term of the Junior Subordinated Debentures
(including any Extension Period), regardless of the receipt of cash with
respect to the period to which such income is attributable. Thus, during an
Extension Period a Holder will be required to include interest in gross income
in advance of the receipt of cash. In addition, any Holder who disposes of a
Preferred Security prior to the record date for the payment of distributions
following such Extension Period will include interest in gross income, but
will not receive any cash distributions relating to interest that accrued
during, and was includible in gross income with respect to, such Extention
Period.
RECEIPT OF JUNIOR SUBORDINATED DEBENTURES IN LIQUIDATION OF ROUSE CAPITAL
Under certain circumstances, as described under "Description of Preferred
Securities--Liquidation Distribution Upon Dissolution", Junior Subordinated
Debentures may be distributed to the Holders in
64
<PAGE>
liquidation of the Issuer. Under current United States federal income tax law,
such a distribution would not be a taxable event to a Holder and each Holder
would have the same tax basis and holding period in the Junior Subordinated
Debentures prior to and following such liquidation.
BACKUP WITHHOLDING TAX AND INFORMATION REPORTING
Backup withholding at a rate of 31% and certain information reporting
requirements may apply to payments on, and proceeds from the disposition of, a
Preferred Security. Backup withholding will generally apply to a Holder unless
such Holder (a) is a corporation or comes within certain exempt categories
and, when required, demonstrates this fact, or (b) provides an accurate
taxpayer identification number.
Any amounts withheld under the backup withholding rules from a payment to a
Holder will be allowed as a credit or as a refund against such Holder's United
States federal income tax liability, provided the required information is
furnished to the Internal Revenue Service.
These backup withholding tax and information reporting rules are subject to
proposed Treasury Regulations and currently are under review by the United
States Treasury. Accordingly, the application of these rules to Holders is
subject to change.
UNDERWRITING
Subject to the terms and conditions of the Underwriting Agreement, Rouse and
the Issuer have agreed that the Issuer will issue and sell to each of the
Underwriters named below (collectively, the "Underwriters"), and each of the
Underwriters, for whom Goldman, Sachs & Co., Alex. Brown & Sons Incorporated,
Lehman Brothers Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated and
Smith Barney Inc. are acting as representatives (the "Representatives"), has
severally agreed to purchase from the Issuer the respective number of
Preferred Securities set forth opposite its name below:
<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITER PREFERRED SECURITIES
----------- --------------------
<S> <C>
Goldman, Sachs & Co....................................
Alex. Brown & Sons Incorporated........................
Lehman Brothers Inc....................................
Merrill Lynch, Pierce, Fenner & Smith Incorporated.....
Smith Barney Inc.......................................
---------
Total................................................ 5,000,000
=========
</TABLE>
Under the terms and conditions of the Underwriting Agreement, the
Underwriters are committed to take and pay for all the Preferred Securities
offered hereby, if any are taken.
The Underwriters propose to offer the Preferred Securities in part directly
to the public at the initial public offering price set forth on the cover page
of this Prospectus, and in part to certain securities dealers at such price
less a concession of $ per Preferred Security. The Underwriters may allow,
and such dealers may reallow, a concession not in excess of $ per Preferred
Security to certain brokers and dealers. After the Preferred Securities are
released for sale to the public, the offering price and other selling terms
may from time to time be varied by the Representatives.
65
<PAGE>
The Issuer and Rouse have granted the Underwriters an option exercisable for
30 days after the date of this Prospectus to purchase up to 750,000 additional
Preferred Securities to cover over-allotments, if any, at the initial public
offering price (with additional Underwriters' Compensation), as set forth on
the cover page of this Prospectus. If the Underwriters exercise their over-
allotment option, the Underwriters have severally agreed, subject to certain
conditions, to purchase approximately the same percentage thereof that the
number of Preferred Securities to be purchased by each of them, as shown in
the foregoing table, bears to the 5,000,000 Preferred Securities initially
offered hereby.
In view of the fact that the proceeds of the sale of the Preferred
Securities (together with the proceeds of the sale by the Issuer to Rouse of
the Common Securities) will be used to purchase the Junior Subordinated
Debentures, the Underwriting Agreement provides that Rouse will pay as
compensation to the Underwriters ("Underwriters' Compensation") a commission
of $ per Preferred Security.
Rouse and the Issuer have agreed, during the period beginning from the date
of this Prospectus and continuing to and including the earlier of (i) the
date, after the closing date, on which the distribution of the Preferred
Securities and the Guarantee ceases, as determined by the Underwriters, or
(ii) 90 days after the closing date, not to offer, sell, contract to sell, or
otherwise dispose of any Preferred Securities, any other interests of the
Issuer, or any preferred stock or any other securities of the Issuer or Rouse
which, in each case, are substantially similar to the Preferred Securities
(including any guarantee of such securities) or any securities convertible
into or exchangeable for Preferred Securities, preferred stock or such
substantially similar securities of either the Issuer or Rouse, without the
prior written consent of the Representatives.
Prior to this offering, there has been no public market for the Preferred
Securities. The Preferred Securities have been approved for listing on the New
York Stock Exchange (the "Exchange"), subject to notice of issuance, under the
symbol "RSEPrZ". In order to meet one of the requirements for listing the
Preferred Securities on the Exchange, the Underwriters will undertake to sell
lots of 100 or more Preferred Securities to a minimum of 400 beneficial
holders. Trading of the Preferred Securities on the Exchange is expected to
commence within a seven-day period after the initial delivery of the Preferred
Securities. The Representatives have advised Rouse that they intend to make a
market in the Preferred Securities prior to commencement of trading on the
Exchange, but they are not obligated to do so and may discontinue any such
market making at any time without notice.
The Issuer and Rouse have agreed to indemnify the Underwriters against
certain liabilities, including liabilities under the Securities Act of 1933,
as amended.
Certain of the Underwriters engage in transactions with, and from time to
time have performed services for, Rouse in the ordinary course of business.
EXPERTS
The audited consolidated financial statements and schedules of Rouse and its
consolidated subsidiaries incorporated herein by reference are incorporated by
reference in reliance upon (1) the report of KPMG Peat Marwick LLP,
independent certified public accountants, incorporated herein by reference,
and the authority of that firm as experts in accounting and auditing, and (2)
with respect to the current value basis financial statements, the report of
Landauer Associates, Inc., real estate counselors and consultants,
incorporated herein by reference, and upon the authority of that firm as
experts in real estate consultation.
66
<PAGE>
VALIDITY OF SECURITIES
Certain matters of Delaware law relating to the validity of the Preferred
Securities, the validity of the Trust Agreement and the formation of the
Issuer are being passed upon by Richards, Layton & Finger, Wilmington,
Delaware, special Delaware counsel to Rouse and the Issuer. The validity of
the Guarantee and the Junior Subordinated Debentures will be passed upon on
behalf of the Issuer and Rouse by Fried, Frank, Harris, Shriver & Jacobson (a
partnership including professional corporations), New York, New York. The
validity of the Preferred Securities, the Guarantee and the Junior
Subordinated Debentures will be passed upon on behalf of the Underwriters by
Sullivan & Cromwell, New York, New York, counsel to the Underwriters. Fried,
Frank, Harris, Shriver & Jacobson and Sullivan & Cromwell will rely upon the
opinion of Richards, Layton & Finger as to certain matters of Delaware law and
upon the opinion of Bruce I. Rothschild, Esq., Vice President, General Counsel
and Secretary of Rouse and upon the opinion of Piper & Marbury L.L.P.,
Baltimore, Maryland, as to matters of Maryland law. As of November 1, 1995,
Mr. Rothschild held options to purchase 14,000 shares of the Company's Common
Stock, of which options to purchase 5,250 shares were presently exercisable,
and also held 3,035 shares of the Company's Common Stock in his account under
the Company's 401(k) Savings Plan.
AVAILABLE INFORMATION
Rouse is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Reports, proxy
statements and other information filed by Rouse may be inspected and copied at
the public reference facilities maintained by the Commission in Room 1024, 450
Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's Regional
Offices located at Seven World Trade Center, 13th Floor, New York, New York
10048 and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Copies of such materials may be obtained upon written request
from the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. In addition, such material may
also be inspected and copied at the offices of The New York Stock Exchange,
Inc., 20 Broad Street, New York, New York 10005, on which certain of Rouse's
securities are listed.
Rouse and the Issuer have filed with the Commission a registration statement
on Form S-3 (together with all amendments and exhibits, referred to as the
"Registration Statement") under the Securities Act of 1933, as amended. This
Prospectus does not contain all of the information set forth in the
Registration Statement, certain parts of which are omitted in accordance with
the rules and regulations of the Commission. For further information,
reference is hereby made to the Registration Statement.
No separate financial statements of the Issuer are included herein. Rouse
considers that such financial statements would not be material to holders of
the Preferred Securities because (i) all of the Common Securities of the
Issuer are owned by Rouse, a reporting company under the Exchange Act; (ii)
the Issuer has no independent operations, but exists for the sole purpose of
issuing securities representing undivided beneficial interests in the assets
of the Issuer and investing the proceeds thereof in the Junior Subordinated
Debentures; and (iii) Rouse has, through the Guarantee, the Trust Agreement,
the Junior Subordinated Debentures, the Indenture and the Expense Agreement,
taken together, fully, irrevocably and unconditionally guaranteed all of the
Issuer's obligations under the Preferred Securities. No single document
standing alone or operating in conjunction with fewer than all of the other
documents constitutes such guarantee. It is only the combined operation of
these documents that has the effect of providing a full, irrevocable and
unconditional guarantee of the Issuer's obligations under the Preferred
Securities.
Holders of the Preferred Securities will receive annual reports of Rouse
containing audited financial statements upon request.
67
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission by Rouse pursuant to the
Exchange Act, are incorporated herein by reference:
1. Rouse's Annual Report on Form 10-K for the year ended December 31,
1994.
2. Rouse's Quarterly Report on Form 10-Q for the quarter ended March 31,
1995.
3. Rouse's Quarterly Report on Form 10-Q for the quarter ended June 30,
1995 (the "June 10-Q").
4. Rouse's Amendment to the June 10-Q, filed September 21,1995.
5. Rouse's Quarterly Report on Form 10-Q for the quarter ended September
30, 1995.
6. Rouse's Current Report on Form 8-K, filed November 20, 1995.
All other documents filed by Rouse pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior
to the termination of this offering shall be deemed to be incorporated by
reference in this Prospectus and to be a part hereof from the respective dates
of the filing of such documents.
Any statement contained herein or in a document all or a portion of which is
incorporated or deemed to be incorporated by reference herein shall be deemed
to be modified or superseded for purposes of this Prospectus to the extent
that a statement contained herein or in any other subsequently filed document
which also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of
this Prospectus.
Rouse will provide without charge to each person, including a beneficial
owner, to whom a copy of this Prospectus has been delivered, upon the written
or oral request of any such person, a copy of any and all of the documents
incorporated herein by reference into this Prospectus, other than exhibits to
such documents (unless such exhibits are specifically incorporated by
reference in such documents). Requests for such copies should be directed to
David L. Tripp, Vice President and Director of Investor Relations, The Rouse
Company, 10275 Little Patuxent Parkway, Columbia, Maryland 21044-3456,
Telephone: (410) 992-6000.
68
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTA-
TIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AU-
THORIZED. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICI-
TATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES TO WHICH IT
RELATES OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY SUCH SECU-
RITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UN-
DER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN
THE AFFAIRS OF THE ISSUER OR ROUSE SINCE THE DATE HEREOF OR THAT THE INFORMA-
TION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE. HOWEV-
ER, IN THE EVENT OF ANY MATERIAL CHANGE, THIS PROSPECTUS WILL BE AMENDED OR
SUPPLEMENTED TO REFLECT SUCH CHANGE AS REQUIRED BY APPLICABLE FEDERAL AND
STATE LAW.
-----------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary....................................................... 5
Risk Factors............................................................. 14
Rouse Capital............................................................ 18
The Rouse Company........................................................ 19
Use of Proceeds.......................................................... 27
Capitalization........................................................... 27
Selected Financial Data of Rouse......................................... 28
Recent Developments...................................................... 30
Management's Discussion and Analysis of Financial Condition and Results
of Operations........................................................... 31
Description of the Preferred Securities.................................. 40
Description of the Guarantee............................................. 51
Description of the Junior Subordinated Debentures........................ 54
Relationship Among the Preferred Securities, the Junior Subordinated
Debentures and the Guarantee............................................ 61
Certain United States Federal Income Tax Considerations.................. 63
Underwriting............................................................. 65
Experts.................................................................. 66
Validity of Securities................................................... 67
Available Information.................................................... 67
Incorporation of Certain Documents by Reference.......................... 68
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
5,000,000
PREFERRED SECURITIES
ROUSE CAPITAL
% CUMULATIVE
QUARTERLY INCOME PREFERRED SECURITIES
GUARANTEED TO THE EXTENT ISSUER HAS
FUNDS AS SET FORTH HEREIN BY
THE ROUSE COMPANY
-----------
PROSPECTUS
-----------
GOLDMAN, SACHS & CO.
ALEX. BROWN & SONS
INCORPORATED
LEHMAN BROTHERS
MERRILL LYNCH & CO.
SMITH BARNEY INC.
REPRESENTATIVES OF THE UNDERWRITERS
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee................ $ 49,569
Printing expenses.................................................. 125,000
Rating agency fees................................................. 80,000
New York Stock Exchange listing fee................................ 47,800
Trustee's fees..................................................... 30,000
Legal fees and expenses............................................ 175,000
Accounting expenses................................................ 30,000
Blue Sky fees and expenses......................................... 36,000
Other.............................................................. 35,000
--------
Total............................................................ $608,369
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article IX of the Bylaws of the Company provides that directors and officers
of the Company shall be indemnified by the Company to the fullest extent
permitted by Maryland law as now or hereafter in force, including the advance
of related expenses. If any determination is required under applicable law as
to whether a director or officer is entitled to indemnification, such
determination shall be made by independent legal counsel retained by the
Company and appointed by either the Board of Directors or the Chief Executive
Officer. Paragraph (f) of Article Seventh of the Amended and Restated Articles
of Incorporation of the Company provides that to the fullest extent permitted
by Maryland statutory or decisional law, as amended or interpreted, no
director or officer of the Company shall be personally liable to the Company
or its stockholders for money damages. A copy of Section 2-418 of the
Corporations and Associations Article of the Annotated Code of Maryland is
included as an Exhibit to this Registration Statement.
The Company maintains directors and officers insurance on behalf of its
directors, officers and certain other persons against any liability asserted
against them in any such capacity. The form of Underwriting Agreement
contained in Exhibit 1.1 provides for indemnification of the directors and
officers signing the Registration Statement and certain controlling persons of
the Company against certain liabilities, including certain liabilities under
the Securities Act of 1933, as amended, in certain instances by each
underwriter participating in an offering of the Preferred Securities.
The Company has agreed to indemnify the Property Trustee, the Delaware
Trustee and the Administrative Trustees against certain liabilities in
connection with the Trust Agreement.
ITEM 16. EXHIBITS
Set forth below is a list of the exhibits included as part of this
Registration Statement.
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<C> <S>
1.1 Form of Underwriting Agreement
*4.1 Certificate of Trust of Rouse Capital
4.2 Form of Trust Agreement
4.3 Form of Indenture between Rouse and The First National Bank of
Chicago, as Debenture Trustee
4.4 Form of Preferred Securities (included in Exhibit 4.2 above)
4.5 Form of Junior Subordinated Debenture (included in Exhibit 4.3 above)
</TABLE>
II-1
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<C> <S>
4.6 Form of Guarantee by Rouse and The First National Bank of Chicago, as
Guarantee Trustee
4.7 Form of Agreement as to Expenses and Liabilities (included in Exhibit
4.2 above)
5.1 Opinion of Richards, Layton & Finger re validity of Preferred
Securities
5.2 Opinion of Fried, Frank, Harris, Shriver & Jacobson re validity of
Guarantee and Junior Subordinated Debentures
5.3 Opinion of Bruce I. Rothschild, Esq.
8.1 Opinion of Fried, Frank, Harris, Shriver & Jacobson re tax matters
*12.1 Computation of Ratio of Earnings to Combined Fixed Charges and
Preferred Dividends
*12.2 Computation of Ratio of Earnings to Fixed Charges
*12.3 Computation of Consolidated Coverage Ratio
23.1 Consent of KPMG Peat Marwick LLP, independent auditors
23.2 Consent of Landauer Associates, Inc., independent real estate
consultants
23.3 Consent of Richards, Layton & Finger (included in Exhibit 5.1 above)
23.4 Consent of Fried, Frank, Harris, Shriver & Jacobson (included in
Exhibit 5.2 above)
23.5 Consent of Bruce I. Rothschild, Esq. (included in Exhibit 5.3 above)
23.6 Consent of Fried, Frank, Harris, Shriver & Jacobson (included in
Exhibit 8.1 above)
*24.1 Power of Attorney, dated September 28, 1995.
*24.2 Power of Attorney, dated September 28, 1995.
25.1 Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of The First National Bank of Chicago, as Debenture Trustee
under the Indenture
25.2 Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of The First National Bank of Chicago, as Trustee under the
Trust Agreement of the Issuer
25.3 Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of The First National Bank of Chicago, as Guarantee Trustee
under the Guarantee
99.1 Section 2-418 of the Corporations and Associations Article of the
Annotated Code of Maryland (which is incorporated by reference from
the Exhibits to the Company's Form S-3 Registration Statement (No.
33-56646))
</TABLE>
- --------
*Previously filed.
ITEM 17. UNDERTAKINGS
The undersigned registrants hereby undertake that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrants' annual reports pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers, and controlling persons of the
registrants pursuant to the foregoing provisions or otherwise, the registrants
have been advised that in the opinion of the Securities and Exchange
II-2
<PAGE>
Commission such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrants of expenses incurred or paid by a director, officer, or
controlling person of the registrants in the successful defense of any action,
suit, or proceeding) is asserted by such director, officer, or controlling
person in connection with the securities being registered, the registrants
will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
questions whether such indemnification by them is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
The undersigned registrants hereby undertake to provide to the underwriter,
at the closing specified in the underwriting agreements, certificates in such
denominations and registered in such names as required by the underwriter to
permit prompt delivery to each purchaser.
The undersigned registrants hereby undertake that:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of
this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrants pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, The Rouse
Company certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this amendment
to the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the County of Howard, State of Maryland, on the
20th day of November, 1995.
THE ROUSE COMPANY
/s/ Anthony W. Deering
By: _________________________________
Anthony W. Deering
President, Chief Executive Officer
and Director
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
Principal Executive Officers:
President, Chief
/s/ Anthony W. Deering Executive Officer November 20,
- ------------------------------------- and Director 1995
ANTHONY W. DEERING
Principal Financial Officer:
Senior Vice
/s/ Jeffrey H. Donahue President and Chief November 20,
- ------------------------------------- Financial Officer 1995
JEFFREY H. DONAHUE
Principal Accounting Officer:
/s/ George L. Yungmann Senior Vice
- ------------------------------------- President and November 20,
GEORGE L. YUNGMANN Controller 1995
II-4
<PAGE>
THE BOARD OF DIRECTORS
David H. Benson, Jeremiah E. Casey, Anthony W. Deering, Rohit M. Desai,
Mathias J. DeVito, Juanita T. James, Thomas J. McHugh, Hanne M. Merriman,
Roger W. Schipke and Alexander F. Trowbridge.
/s/ Mathias J. DeVito For himself and as November 20,
- ------------------------------------- Attorney-in-Fact for 1995
MATHIAS J. DEVITO the above-named
members of the Board
of Directors
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Rouse Capital
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this amendment to the
Registration Statement to be signed on its behalf by the undersigned thereunto
duly authorized, in the County of Howard, State of Maryland, on the 20th day
of November, 1995.
ROUSE CAPITAL
By: THE ROUSE COMPANY, as Depositor
/s/ Jeffrey H. Donahue
By: _________________________________
Jeffrey H. Donahue Senior Vice
President and Chief Financial
Officer
II-6
<PAGE>
EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<C> <S>
1.1 Form of Underwriting Agreement
*4.1 Certificate of Trust of Rouse Capital
4.2 Form of Trust Agreement
4.3 Form of Indenture between Rouse and The First National Bank of
Chicago, as Debenture Trustee
4.4 Form of Preferred Securities (included in Exhibit 4.2 above)
4.5 Form of Junior Subordinated Debenture (included in Exhibit 4.3 above)
4.6 Form of Guarantee by Rouse and The First National Bank of Chicago, as
Guarantee Trustee
4.7 Form of Agreement as to Expenses and Liabilities (included in Exhibit
4.2 above)
5.1 Opinion of Richards, Layton & Finger re validity of Preferred
Securities
5.2 Opinion of Fried, Frank, Harris, Shriver & Jacobson re validity of
Guarantee and Junior Subordinated Debentures
5.3 Opinion of Bruce I. Rothschild, Esq.
8.1 Opinion of Fried, Frank, Harris, Shriver & Jacobson re tax matters
*12.1 Computation of Ratio of Earnings to Combined Fixed Charges and
Preferred Dividends
*12.2 Computation of Ratio of Earnings to Fixed Charges
*12.3 Computation of Consolidated Coverage Ratio
23.1 Consent of KPMG Peat Marwick LLP, independent auditors
23.2 Consent of Landauer Associates, Inc., independent real estate
consultants
23.3 Consent of Richards, Layton & Finger (included in Exhibit 5.1 above)
23.4 Consent of Fried, Frank, Harris, Shriver & Jacobson (included in
Exhibit 5.2 above)
23.5 Consent of Bruce I. Rothschild, Esq. (included in Exhibit 5.3 above)
23.6 Consent of Fried, Frank, Harris, Shriver & Jacobson (included in
Exhibit 8.1 above)
*24.1 Power of Attorney, dated September 28, 1995
*24.2 Power of Attorney, dated September 28, 1995
25.1 Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of The First National Bank of Chicago, as Debenture Trustee
under the Indenture
25.2 Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of The First National Bank of Chicago, as Trustee under the
Trust Agreement of the Issuer
25.3 Statement of Eligibility under the Trust Indenture Act of 1939, as
amended, of The First National Bank of Chicago, as Guarantee Trustee
under the Guarantee
99.1 Section 2-418 of the Corporations and Associations Article of the
Annotated Code of Maryland (which is incorporated by reference from
the Exhibits to the Company's Form S-3 Registration Statement (No.
33-56646))
</TABLE>
- --------
* Previously filed.
<PAGE>
EXHIBIT 1.1
ROUSE CAPITAL
____% CUMULATIVE QUARTERLY INCOME PREFERRED SECURITIES ("QUIPS")
(LIQUIDATION AMOUNT $25 PER PREFERRED SECURITY)
_______________
UNDERWRITING AGREEMENT
----------------------
______________, 1995
Goldman, Sachs & Co.,
Alex. Brown & Sons Incorporated,
Lehman Brothers Inc.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated,
Smith Barney Inc.
As representatives of the several Underwriters
named in Schedule I hereto,
c/o Goldman, Sachs & Co.,
85 Broad Street,
New York, New York 10004.
Ladies and Gentlemen:
Rouse Capital, a statutory business trust formed under the laws of the State
of Delaware (the "Trust"), and The Rouse Company, a Maryland corporation, as
depositor of the Trust and as guarantor ("Rouse"), propose, subject to the terms
and conditions stated herein, that the Trust issue and sell to the Underwriters
named in Schedule I hereto (the "Underwriters") an aggregate of 4,000,000 (the
"Firm Securities") and, at the election of the Underwriters, up to an additional
600,000 (the "Optional Securities") .....% Cumulative Quarterly Income Preferred
Securities (liquidation amount $25 per preferred security) representing
undivided beneficial interests in the assets of the Trust, guaranteed on a
subordinated basis by Rouse as to the payment of distributions, and as to
payments on liquidation or redemption, to the extent set forth in a guarantee
agreement (the "Guarantee") between Rouse and The First National Bank of
Chicago, as trustee (the "Guarantee Trustee"). The Firm Securities and the
Optional Securities that the Underwriters elect to purchase pursuant to Section
2 hereof are referred to collectively as the "Securities". The Trust is to
purchase, with the proceeds of the sale of the Securities and up to 123,712 (or
142,268 assuming full exercise by the Underwriters of the over-allotment option
described herein) of its Common Securities (liquidation amount $25 per common
security) (the "Common Securities"), .....% Junior Subordinated Debentures due
2025 (the "Subordinated Debentures") of Rouse, to be issued pursuant to an
Indenture (the "Indenture") between Rouse and The First National Bank of
Chicago, as trustee (the "Debenture Trustee").
1. Each of the Trust and Rouse, jointly and severally, represents and
warrants to, and agrees with, each of the Underwriters that:
<PAGE>
(a) A registration statement on Form S-3 (File Nos. 33-63279 and 33-63279-01)
(the "Initial Registration Statement") in respect of the Securities, the
Subordinated Debentures and the Guarantee (collectively, the "Registered
Securities") has been filed with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Act"); the
Initial Registration Statement and any post-effective amendment thereto, each in
the form heretofore delivered to you, and, excluding exhibits thereto but
including all documents incorporated by reference in the prospectus contained
therein, to you for each of the other Underwriters, have been declared effective
by the Commission in such form; other than a registration statement, if any,
increasing the size of the offering (a "Rule 462(b) Registration Statement")
filed pursuant to Rule 462(b) under the Act which became effective upon filing,
no other document with respect to the Initial Registration Statement or document
incorporated by reference therein has heretofore been filed, or transmitted for
filing, with the Commission; and no stop order suspending the effectiveness of
the Initial Registration Statement, any post-effective amendment thereto or the
Rule 462(b) Registration Statement, if any, has been issued and no proceeding
for that purpose has been initiated or threatened by the Commission (any
preliminary prospectus included in the Initial Registration Statement or filed
with the Commission pursuant to Rule 424(a) of the rules and regulations of the
Commission under the Act, is hereinafter called a "Preliminary Prospectus"; the
various parts of the Initial Registration Statement and the 462(b) Registration
Statement, if any, including all exhibits thereto and including (i) the
information contained in the form of final prospectus filed with the Commission
pursuant to Rule 424(b) under the Act in accordance with Section 5(a) hereof and
deemed by virtue of Rule 430A under the Act to be part of the Initial
Registration Statement at the time it was declared effective and (ii) the
documents incorporated by reference in the prospectus contained in the
registration statement at the time such part of the registration statement
became effective, each as amended at the time such part of the registration
statement became effective or such part of the Rule 462(b) Registration
Statement, if any, became or hereafter becomes effective, are hereinafter
collectively called the "Registration Statement"; such final prospectus, in the
form first filed pursuant to Rule 424(b) under the Act, is hereinafter called
the "Prospectus"; any reference herein to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 under the Act, as of the date
of such Preliminary Prospectus or Prospectus, as the case may be; and any
reference to any amendment or supplement to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include any documents filed after the
date of such Preliminary Prospectus or Prospectus, as the case may be, under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
incorporated by reference in such Preliminary Prospectus or Prospectus, as the
case may be; and any reference to any amendment to the Registration Statement
shall be deemed to refer to and include any annual report of Rouse filed
pursuant to Section 13(a) or 15(d) of the Exchange Act after the effective date
of the Initial Registration Statement that is incorporated by reference in the
Registration Statement);
(b) No order preventing or suspending the use of any Preliminary Prospectus
has been issued by the Commission, and each Preliminary Prospectus, at the time
of filing thereof, conformed in all material respects to the requirements of the
Act and the rules and regulations of the Commission thereunder, and did not
contain an untrue statement of a
2
<PAGE>
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, however, that this
representation and warranty shall not apply to any statements or omissions made
in reliance upon and in conformity with information furnished in writing to the
Trust and Rouse by an Underwriter through Goldman, Sachs & Co. expressly for use
therein;
(c) The documents incorporated by reference in the Prospectus, when they
became effective or were filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the Act or the
Exchange Act, as applicable, and the rules and regulations of the Commission
thereunder, and none of such documents contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading; and any further
documents so filed and incorporated by reference in the Prospectus or any
further amendment or supplement thereto, when such documents become effective or
are filed with the Commission, as the case may be, will conform in all material
respects to the requirements of the Act or the Exchange Act, as applicable, and
the rules and regulations of the Commission thereunder and will not contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading;
provided, however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with information
furnished in writing to the Trust and Rouse by an Underwriter through Goldman,
Sachs & Co. expressly for use therein;
(d) The Registration Statement conforms, and the Prospectus and any further
amendments or supplements to the Registration Statement or the Prospectus will
conform, in all material respects to the requirements of the Act and the Trust
Indenture Act of 1939, as amended (the "TIA"), and the rules and regulations of
the Commission thereunder and do not and will not, as of the applicable
effective date as to the Registration Statement and any amendment thereto, and
as of the applicable filing date as to the Prospectus and any amendment or
supplement thereto, contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, that this representation
and warranty shall not apply to any statements or omissions made in reliance
upon and in conformity with information furnished in writing to the Trust and
Rouse by an Underwriter through Goldman, Sachs & Co. expressly for use therein;
(e) Neither the Trust nor Rouse and its subsidiaries, taken as a whole, has
sustained since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus any material loss or interference
with its business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated in the Prospectus;
and, since the respective dates as of which information is given in the
Registration Statement and the Prospectus, there has not been any change in the
capital stock (other than issuances of capital stock pursuant to bonus stock
awards granted in the ordinary course of business, or upon exercise of options
and stock appreciation rights and upon conversions of convertible securities, in
each case, except with respect to bonus stock awards granted in the ordinary
course of business, which were
3
<PAGE>
outstanding as of the date of the latest audited financial statements included
or incorporated by reference in the Prospectus), or any material and adverse
change in the long-term debt of Rouse and its subsidiaries, taken as a whole (it
being understood that, absent unusual circumstances, an increase in long-term
debt of Rouse and its subsidiaries, taken as a whole, of less than 5% would not
be a material and adverse change to Rouse and its subsidiaries, taken as a
whole), or any material and adverse change, or any development involving a
prospective material adverse change, in or affecting the general affairs,
management, financial position or securityholders' equity of the Trust or
general affairs, management, current value basis shareholders' equity or results
of operations (based on earnings before depreciation and deferred taxes from
operations) of Rouse and its subsidiaries, taken as a whole, otherwise than as
set forth or contemplated in the Prospectus;
(f) Rouse and its subsidiaries have, or in those cases where such subsidiary
is a general partner in a partnership, such partnership has, good and marketable
fee simple and/or leasehold title (as the case may be) to all real property
(except for those lesser estates in real property which, in the aggregate, are
not material in value to Rouse and its subsidiaries, taken as a whole), subject
only to (i) those liens and encumbrances which have been reflected generally or
in the aggregate in the financial statements of Rouse as disclosed in the
Prospectus or as are described specifically, generally or in the aggregate in
the Prospectus, or (ii) such liens and encumbrances (A) not required by
generally accepted accounting principles to be disclosed in the financial
statements of Rouse which (1) if all material covenants and conditions thereof
are observed or performed, will not materially interfere with the use made or
proposed to be made of such property by Rouse and its subsidiaries or (2) are
reasonable and customary with regard to the normal operation of land and
improvements held for commercial purposes by first class owners and operators of
commercial real estate, or (B) which were incurred after the date of the latest
audited financial statements included or incorporated by reference in the
Prospectus in the ordinary course of business (including financings) and which,
in the aggregate (on a net basis), are not material to Rouse and its
subsidiaries, taken as a whole. Rouse and its subsidiaries have title to the
personal property owned by it or them and, subject to the continued performance
of the material covenants and conditions of liens and encumbrances thereon, have
the right to use such personal property without interference in the normal
course of business, except for such interference as would not have a material
adverse effect on Rouse and its subsidiaries taken as a whole;
(g) The Trust has been duly created and is validly existing as a statutory
business trust in good standing under the Business Trust Act of the State of
Delaware (the "Delaware Business Trust Act") with the power and authority (trust
and other) to own property and conduct its business as described in the
Prospectus, and has conducted and will conduct no business other than the
transactions contemplated by this Agreement and described in the Prospectus; the
Trust is not a party to or bound by any agreement or instrument other than this
Agreement, the Amended and Restated Trust Agreement (the "Trust Agreement")
between Rouse and the trustees named therein (the "Trustees") and the agreements
and instruments contemplated by the Trust Agreement and described in the
Prospectus; the Trust has no liabilities or obligations other than those arising
out of the transactions contemplated by this Agreement and the Trust Agreement
and described in the Prospectus; based on expected operations and current law,
the Trust is not and will not
4
<PAGE>
be classified as an association taxable as a corporation for United States
federal income tax purposes; and the Trust is not a party to or subject to any
action, suit or proceeding of any nature;
(h) Rouse has been duly incorporated and is validly existing as a corporation
in good standing under the laws of Maryland, with power and authority (corporate
and other) to own its properties and conduct its business as described in the
Prospectus, and has been duly qualified as a foreign corporation for the
transaction of business and is in good standing under the laws of each other
jurisdiction in which the failure so to qualify and maintain good standing would
have a material adverse effect on Rouse and its subsidiaries, taken as a whole;
and each subsidiary of Rouse has been duly incorporated and is validly existing
as a corporation in good standing under the laws of its jurisdiction of
incorporation except for such failures to maintain good standing as would not
have a material adverse effect on Rouse and its subsidiaries, taken as a whole;
(i) Rouse has an authorized capitalization as set forth in the Prospectus,
and all of the issued shares of capital stock of Rouse have been duly and
validly authorized and issued and are fully paid and non-assessable; and all of
the outstanding beneficial interests in the assets of the Trust have been duly
authorized and issued, are fully paid and non-assessable and conform to the
descriptions thereof contained in the Prospectus; and all of the issued shares
of capital stock of each corporate subsidiary and partnership interests of each
partnership subsidiary of Rouse have been duly and validly authorized and
issued, are fully paid and non-assessable and are owned (with exceptions that
are not material to Rouse and its subsidiaries, taken as a whole) directly or
indirectly by Rouse, free and clear of all liens, encumbrances, security
interests, equities or claims (collectively, "Liens") except (i) Liens relating
to debt which have been disclosed specifically, generally or in the aggregate in
the Prospectus or incurred after the date of the latest audited financial
statements included or incorporated by reference in the Prospectus in the
ordinary course of business (including financings), (ii) Liens incurred in the
ordinary course of business which are not materially adverse to the operations
of Rouse and its subsidiaries, taken as a whole, and (iii) restrictions on the
transfer or use of the stock of any corporate subsidiary under any partnership,
joint venture or lease agreements to which Rouse or any of its subsidiaries is a
party;
(j) The Securities have been duly and validly authorized by the Trust, and,
when issued and delivered against payment therefor as provided herein, will be
duly and validly issued and fully paid and non-assessable undivided beneficial
interests in the assets of the Trust and will conform to the description thereof
contained in the Prospectus; the issuance of the Securities is not subject to
preemptive or other similar rights; the Securities will have the rights set
forth in the Trust Agreement, and the terms of the Securities are valid and
binding on the Trust; the holders of the Securities (the "Securityholders") will
be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware;
(k) The Common Securities have been duly and validly authorized by the Trust
and upon delivery by the Trust to Rouse against payment therefor as described in
the Prospectus, will be duly and validly issued undivided beneficial interests
in the assets of the Trust and will conform to the description thereof contained
in the Prospectus; the issuance of the Common Securities is not subject to
preemptive or other similar rights; and at each
5
<PAGE>
Time of Delivery (as defined in Section 4 hereof), all of the issued and
outstanding Common Securities of the Trust will be directly owned by Rouse free
and clear of any Lien; and the Common Securities and the Securities are the only
interests authorized to be issued by the Trust;
(l) The Guarantee, the Subordinated Debentures, the Trust Agreement, the
Agreement as to Expenses and Liabilities between Rouse and the Trust (the
"Expense Agreement") and the Indenture (collectively, the "Guarantor
Agreements") have each been duly authorized and when validly executed and
delivered by Rouse and, in the case of the Guarantee, by the Guarantee Trustee,
in the case of the Trust Agreement, by the Trustees and, in the case of the
Indenture, by the Debenture Trustee, and, in the case of the Subordinated
Debentures, when validly authenticated and delivered by the Debenture Trustee,
will constitute valid and legally binding obligations of Rouse, enforceable in
accordance with their respective terms, subject, as to enforcement, to
bankruptcy, insolvency, moratorium, reorganization and similar laws of general
applicability relating to or affecting creditors' rights and to general equity
principles (whether considered at a proceeding in equity or at law); the Trust
Agreement, the Indenture and the Guarantee have been duly qualified under the
TIA; the Subordinated Debentures are entitled to the benefits of the Indenture;
and the Guarantor Agreements will conform to the descriptions thereof in the
Prospectus;
(m) The issue and sale of the Securities and the Common Securities by the
Trust, the compliance by the Trust with all of the provisions of this Agreement,
the purchase of the Subordinated Debentures by the Trust, the distribution of
the Subordinated Debentures by the Trust in the circumstances contemplated by
the Trust Agreement and the consummation of the transactions contemplated herein
and in the Trust Agreement will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default under,
any agreement or instrument to which the Trust is a party or by which the Trust
is bound or to which any of the property or assets of the Trust is subject, nor
will such actions result in any violation of the provisions of the Trust
Agreement or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Trust or any of its
properties; and no consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body is
required for the issue and sale of the Securities and the Common Securities by
the Trust, the purchase of the Subordinated Debentures by the Trust or the
consummation by the Trust of the transactions contemplated by this Agreement and
the Trust Agreement, except the registration under the Act and the Exchange Act
of the Registered Securities, the qualification of the Trust Agreement, the
Indenture and the Guarantee under the TIA, and such consents, approvals,
authorizations, registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the purchase and distribution of
the Securities by the Underwriters;
(n) The issue and sale of the Securities and the Common Securities by the
Trust, the issuance by Rouse of the Guarantee, the compliance by Rouse and the
Trust with all of the provisions of this Agreement, the execution, delivery and
performance by Rouse of the Guarantor Agreements, the distribution of the
Subordinated Debentures by the Trust in the circumstances contemplated by the
Trust Agreement and the consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach or violation of any of
the terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which Rouse or any of its subsidiaries is a party or by which Rouse
6
<PAGE>
or any of its subsidiaries is bound or to which any of the property or assets of
Rouse or any of its subsidiaries is subject except for such conflict, breach,
violation or default which does not have a material adverse effect on Rouse and
its subsidiaries, taken as a whole, nor will such action require a consent or
approval of any holder of Rouse's capital stock or result in any violation of
the provisions of the Articles of Incorporation (or any articles supplementary
thereto) or by-laws of Rouse or the charter or by-laws of any of its corporate
subsidiaries or any organizational document of any other subsidiary or any
statute or any order, rule or regulation of any court or governmental agency or
body having jurisdiction over Rouse or any of its subsidiaries or any of their
properties; and no consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body is
required for the issue of the Guarantee, the issuance and sale of the
Subordinated Debentures, the distribution of the Subordinated Debentures by the
Trust in the circumstances contemplated by the Trust Agreement or the
consummation by Rouse of the other transactions contemplated by this Agreement
and the Guarantor Agreements, except the registration under the Act of the
Registered Securities and the qualification of the Trust Agreement, the
Indenture and the Guarantee under the TIA and such consents, approvals,
authorizations, registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the purchase of the Securities
and distribution of the Securities by the Underwriters;
(o) Other than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which Rouse or any of its subsidiaries is a
party or to which any property of Rouse or any of its subsidiaries, is subject,
which are likely, individually or in the aggregate, to have a material adverse
effect on Rouse and its subsidiaries, taken as a whole, and, to the best of
Rouse's knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others;
(p) Neither the Trust nor Rouse is nor, after giving effect to the offering
and sale of the Securities, will be an "investment company" or an entity
"controlled" by an "investment company", as such terms are defined in the
Investment Company Act of 1940, as amended (the "Investment Company Act");
(q) Neither the Trust, Rouse nor any of Rouse's affiliates does business with
the government of Cuba or with any person or affiliate located in Cuba within
the meaning of Section 517.075, Florida Statutes;
(r) There are no contracts, agreements or understandings between the Trust or
Rouse and any person that grant such person the right to require the Trust or
Rouse to file a registration statement under the Act with respect to any
beneficial interests in the assets of the Trust owned or to be owned by such
person or to require the Trust or Rouse to include such securities in the
securities registered pursuant to the Registration Statement or in any
securities being registered pursuant to any other registration statement filed
by the Trust or Rouse under the Act; and
(s) KPMG Peat Marwick LLP, who have certified certain financial statements of
Rouse and its subsidiaries, are independent public accountants as required by
the Act and the rules and regulations of the Commission thereunder.
7
<PAGE>
2. Subject to the terms and conditions herein set forth, (a) the Trust and
Rouse agree that the Trust shall issue and sell to each of the Underwriters, and
each of the Underwriters agrees, severally and not jointly, to purchase from the
Trust, at a purchase price per share of $................. per Security, the
number of Firm Securities set forth opposite the name of such Underwriter in
Schedule I hereto and (b) in the event and to the extent that the Underwriters
shall exercise the election to purchase Optional Securities as provided below,
the Trust and Rouse agree to issue and sell to each of the Underwriters, and
each of the Underwriters agrees, severally and not jointly, to purchase, at the
purchase price per Security set forth in clause (a) of this Section 2, that
portion of the number of Optional Securities as to which such election shall
have been exercised (to be adjusted by you so as to eliminate fractional
Securities) determined by multiplying such number of Optional Securities by a
fraction, the numerator of which is the maximum number of Optional Securities
which such Underwriter is entitled to purchase as set forth opposite the name of
such Underwriter in Schedule I hereto and the denominator of which is the
maximum number of Optional Securities that all of the Underwriters are entitled
to purchase hereunder.
The Trust and Rouse hereby grant to the Underwriters the right to purchase at
their election up to 600,000 Optional Securities, at the purchase price per
Security set forth in the paragraph above, for the sole purpose of covering
over-allotments in the sale of the Firm Securities. Any such election to
purchase Optional Securities may be exercised only by written notice from you to
Rouse, given within a period of 30 calendar days after the date of this
Agreement, setting forth the aggregate number of Optional Securities to be
purchased and the date on which such Optional Securities are to be delivered, as
determined by you but in no event earlier than the First Time of Delivery (as
defined in Section 4 hereof) or, unless you and Rouse otherwise agree in
writing, earlier than two or later than ten business days after the date of such
notice.
As compensation to the Underwriters for their commitments hereunder, and in
view of the fact that the proceeds of the sale of the Securities will be used by
the Trust to purchase the Subordinated Debentures of Rouse, Rouse at each Time
of Delivery will pay to Goldman, Sachs & Co., for the accounts of the several
Underwriters, an amount equal to $.............. per Security for the Securities
to be delivered by Rouse hereunder at such Time of Delivery.
3. Upon the authorization by you of the release of the Firm Securities,
the several Underwriters propose to offer the Firm Securities for sale upon the
terms and conditions set forth in the Prospectus.
4. (a) The Securities to be purchased by each Underwriter hereunder
will be represented by one or more definitive global Securities in book-
entry form which will be deposited by or on behalf of the Trust with The
Depository Trust Company ("DTC") or its designated custodian. The Trust
will deliver the Securities to Goldman, Sachs & Co., for the account of
each Underwriter, against payment by or on behalf of such Underwriter of
the purchase price therefor in next day funds, by causing DTC to credit
the Securities to the account of Goldman, Sachs & Co. at DTC. The Trust
will cause the certificates representing the Securities to be made
available to Goldman, Sachs & Co. for checking at least twenty-four hours
prior to the Time of Delivery at the office of DTC or its designated
custodian (the
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"Designated Office"). The time and date of such delivery and payment shall
be, with respect to the Firm Securities, 9:30 a.m., New York time, on
...................., 1995 or such other time and date as Goldman, Sachs &
Co. and Rouse may agree upon in writing, and, with respect to the Optional
Securities, 9:30 a.m., New York time, on the date specified by Goldman,
Sachs & Co. in the written notice given by Goldman, Sachs & Co. of the
Underwriters' election to purchase such Optional Securities, or such other
time and date as Goldman, Sachs & Co. and Rouse may agree upon in writing.
Such time and date for delivery of the Firm Securities is herein called the
"First Time of Delivery", such time and date for delivery of the Optional
Securities, if not the First Time of Delivery, is herein called the "Second
Time of Delivery", and each such time and date for delivery is herein
called a "Time of Delivery".
At each Time of Delivery, Rouse will pay, or cause to be paid, the
commission payable at such Time of Delivery to the Underwriters under
Section 2 hereof in next day funds.
(b) The documents to be delivered at each Time of Delivery by or on
behalf of the parties hereto pursuant to Section 7 hereof, including the
cross-receipt for the Securities and any additional documents requested by
the Underwriters pursuant to Section 7(n) hereof, and the check or checks
specified in subsection (a) above, will be delivered at the offices of
Sullivan & Cromwell, 250 Park Avenue, New York, New York 10177 (the
"Closing Location"), and the Securities will be delivered at the Designated
Office, all at such Time of Delivery. A meeting will be held at the
Closing Location at ......... p.m., New York City time, on the New York
Business Day next preceding such Time of Delivery, at which meeting the
final drafts of the documents to be delivered pursuant to the preceding
sentence will be available for review by the parties hereto. For the
purposes of this Section 4, "New York Business Day" shall mean each Monday,
Tuesday, Wednesday, Thursday and Friday which is not a day on which banking
institutions in New York are generally authorized or obligated by law or
executive order to close.
5. The Trust and Rouse, jointly and severally, agree with each of the
Underwriters:
(a) To prepare the Prospectus in a form approved by you and to file such
Prospectus pursuant to Rule 424(b) under the Act not later than the close
of business on the business day following the execution and delivery of
this Agreement, or, if applicable, such earlier time as may be required by
Rule 430A(a)(3) under the Act; to make no further amendment or any
supplement to the Registration Statement or Prospectus prior to the last
Time of Delivery which shall be disapproved by you promptly after
reasonable notice thereof; to advise you, promptly after it receives notice
thereof, of the time when any amendment to the Registration Statement has
been filed or becomes effective or any supplement to the Prospectus or any
amended Prospectus has been filed and to furnish you with copies thereof;
in the case of Rouse, to file promptly all reports and any definitive proxy
or information statements required to be filed by Rouse with the Commission
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act
subsequent to the date of the Prospectus and for so long as the delivery of
a prospectus is required in connection with the offering or
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sale of the Securities; to advise you, promptly after it receives notice
thereof, of the issuance by the Commission of any stop order or of any
order preventing or suspending the use of any Preliminary Prospectus or
prospectus, of the suspension of the qualification of the Registered
Securities for offering or sale in any jurisdiction, of the initiation or
threatening of any proceeding for any such purpose, or of any request by
the Commission for the amending or supplementing of the Registration
Statement or Prospectus or for additional information; and, in the event of
the issuance of any stop order or of any order preventing or suspending the
use of any Preliminary Prospectus or prospectus relating to the Registered
Securities or suspending any such qualification, promptly to use its best
efforts to obtain the withdrawal of such order;
(b) Promptly from time to time to take such action as you may reasonably
request to qualify the Registered Securities for offering and sale under
the securities laws of such jurisdictions as you may request and to comply
with such laws so as to permit the continuance of sales and dealings
therein in such jurisdictions for as long as may be necessary to complete
the distribution of the Securities, provided that in connection therewith
neither the Trust nor Rouse shall be required to qualify as a foreign
corporation or to file a general consent to service of process in any
jurisdiction;
(c) Prior to 10:00 a.m., New York City time, on the New York Business Day
next succeeding the date of this Agreement and from time to time, to use
its best efforts to furnish the Underwriters with copies of the Prospectus
in New York in such quantities as you may reasonably request, and, if the
delivery of a prospectus is required at any time prior to the expiration of
nine months after the time of issue of the Prospectus in connection with
the offering or sale of the Securities and if at such time any event shall
have occurred as a result of which the Prospectus as then amended or
supplemented would include an untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made when
such Prospectus is delivered, not misleading, or, if for any other reason
it shall be necessary during such period to amend or supplement the
Prospectus or to file under the Exchange Act any document incorporated by
reference in the Prospectus in order to comply with the Act, the Exchange
Act or the TIA, to notify you and upon your request to file such document
and to prepare and furnish without charge to each Underwriter and to any
dealer in securities as many copies as you may from time to time reasonably
request of an amended Prospectus or a supplement to the Prospectus which
will correct such statement or omission or effect such compliance, and in
case any Underwriter is required to deliver a prospectus in connection with
sales of any of the Securities at any time nine months or more after the
time of issue of the Prospectus, upon your request but at the expense of
such Underwriter, to prepare and deliver to such Underwriter as many copies
as you may request of an amended or supplemented Prospectus complying with
Section 10(a)(3) of the Act;
(d) In the case of Rouse, to make generally available to its shareholders
as soon as practicable, but in any event not later than eighteen months
after the effective date of the Registration Statement (as defined in Rule
158(c) under the Act), an
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earnings statement of Rouse and its subsidiaries (which need not be
audited) complying with Section 11(a) of the Act and the rules and
regulations thereunder (including, at the option of Rouse, as the case may
be, Rule 158);
(e) During the period beginning from the date hereof and continuing to
and including the earlier of (i) the date, after the First Time of
Delivery, on which the distribution of the Securities ceases, as determined
by you, and (ii) 90 days after the First Time of Delivery, not to offer,
sell, contract to sell or otherwise dispose of, any other beneficial
interests in the Trust, or any other securities of the Trust or Rouse, as
the case may be, that are substantially similar to the Securities
(including any guarantee of such Securities) or any securities that are
convertible into or exchangeable for, or that represent the right to
receive, any such substantially similar securities of either the Trust or
Rouse, without the prior written consent of Goldman, Sachs & Co.;
(f) To furnish to Securityholders as soon as practicable after the end of
each fiscal year ending prior to the third anniversary of the First Time of
Delivery an annual report (including a balance sheet and statements of
income, securityholders' equity and cash flows of Rouse and its
consolidated subsidiaries certified by independent public accountants) and,
as soon as practicable after the end of each of the first three quarters of
each fiscal year (beginning with the fiscal quarter ending after the
effective date of the Registration Statement), consolidated summary
financial information of Rouse and its subsidiaries for such quarter in
reasonable detail;
(g) During a period of five years from the effective date of the
Registration Statement, to furnish to Goldman, Sachs & Co., on your behalf,
copies of all reports or other communications (financial or other)
furnished to shareholders of Rouse, and to deliver to you (i) as soon as
they are available, copies of any reports and financial statements
furnished to or filed with the Commission or any national securities
exchange on which any class of securities of the Trust or Rouse is listed;
and (ii) such additional information concerning the business and financial
condition of the Trust or Rouse as you may from time to time reasonably
request (such financial statements to be on a consolidated basis to the
extent the accounts of the Trust and Rouse and its subsidiaries are
consolidated in reports furnished to their securityholders generally or to
the Commission);
(h) In the case of Rouse, to issue the Guarantee concurrently with the
issue and sale of the Securities as contemplated herein;
(i) To use the net proceeds received by it from the sale of the
Securities, in the case of the Trust, and the Subordinated Debentures, in
the case of Rouse, pursuant to this Agreement in the manner specified in
the Prospectus under the caption "Use of Proceeds"; and
(j) To use all reasonable efforts to list the Securities on the New York
Stock Exchange.
6. Rouse covenants and agrees with the several Underwriters that Rouse
will pay or cause to be paid the following: (i) the fees, disbursements and
expenses of the Trust's and Rouse's counsel and their accountants in connection
with the registration of the
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Registered Securities under the Act and all other expenses in connection with
the preparation, printing and filing of the Registration Statement, any
Preliminary Prospectus and the Prospectus and amendments and supplements thereto
and the mailing and delivering of copies thereof to the Underwriters and
dealers; (ii) the cost of printing or producing any Agreement among
Underwriters, this Agreement, the Indenture, the Trust Agreement, the Guarantee,
the Legal Investment and Blue Sky Memoranda, closing documents (including any
compilations thereof) and any other documents in connection with the offering,
purchase, sale and delivery of the Registered Securities; (iii) all expenses in
connection with the qualification of the Registered Securities for offering and
sale under state securities laws as provided in Section 5(b) hereof, including
the fees and disbursements of counsel for Rouse and the Trust in connection with
such qualification and in connection with the Legal Investment and Blue Sky
surveys; (iv) any fees charged by securities rating services for rating the
Securities; (v) all fees and expenses in connection with listing the Securities
on the New York Stock Exchange and the cost of registering the Securities under
Section 12 of the Exchange Act; (vi) the filing fees incident to, and the
reasonable fees and disbursements of counsel for the Underwriters in connection
with, securing any required review by the National Association of Securities
Dealers, Inc. of the terms of the sale of the Securities; (vii) the cost of
preparing certificates for the Securities and the Subordinated Debentures;
(viii) the cost and charges of any transfer agent or registrar; (ix) the cost
and charges of qualifying the Securities with The Depository Trust Company; (x)
the fees and expenses of the Trustees, the Debenture Trustee and Guarantee
Trustee and any agent thereof and the fees and disbursements of their counsel;
and (xi) all other costs and expenses incident to the performance of its
obligations hereunder which are not otherwise specifically provided for in this
Section. It is understood, however, that, except as provided in this Section and
Sections 8 and 11 hereof, the Underwriters will pay all of their own costs and
expenses, including the fees of their counsel, transfer taxes on resale of any
of the Securities by them, and any advertising expenses connected with any
offers they may make.
7. The obligations of the Underwriters hereunder, as to the Securities to
be delivered at each Time of Delivery, shall be subject, in their discretion, to
the condition that all representations and warranties and other statements of
the Trust and Rouse herein are, at and as of such Time of Delivery, true and
correct, the condition that the Trust and Rouse shall have performed all of
their respective obligations hereunder theretofore to be performed, and the
following additional conditions:
(a) The Prospectus shall have been filed with the Commission pursuant to
Rule 424(b) within the applicable time period prescribed for such filing by
the rules and regulations under the Act and in accordance with Section 5(a)
hereof; no stop order suspending the effectiveness of the Registration
Statement or any part thereof shall have been issued and no proceeding for
that purpose shall have been initiated or threatened by the Commission; and
all requests for additional information on the part of the Commission shall
have been complied with to your reasonable satisfaction;
(b) Sullivan & Cromwell, counsel for the Underwriters, shall have
furnished to you such opinion or opinions (a draft of each such opinion is
attached as Annex II(a) hereto), dated such Time of Delivery, with respect
to: the incorporation of Rouse and the formation of the Trust; insofar as
the federal laws of the United States and the
12
<PAGE>
laws of the State of New York or the State of Delaware are concerned, the
validity of the Registered Securities, the Registration Statement and the
Prospectus; and other related matters as you may reasonably request, and
such counsel shall have received such papers and information as they may
reasonably request to enable them to pass upon such matters; provided that
in rendering such opinion, Sullivan & Cromwell may rely upon the opinion of
Richards, Layton & Finger delivered pursuant to subsection (e) hereof as to
certain matters of Delaware law and the opinion of Piper & Marbury
delivered pursuant to subsection (f) hereof as to certain matters of
Maryland law;
(c) Bruce I. Rothschild, Vice President and General Counsel of Rouse
shall have furnished to you his written opinion (a draft of such opinion is
attached as Annex II(b) hereto) (which may be limited to the laws of the
State of Maryland and, with respect to clauses (viii)-(xiv) below, the
federal laws of the United States), dated such Time of Delivery, in form
and substance satisfactory to you, to the effect that:
(i) Rouse has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Maryland
with power and authority (corporate and other) to own its properties
and conduct its business as described in the Prospectus;
(ii) Rouse has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of Rouse
have been duly and validly authorized and issued and are fully paid
and non-assessable and all of the issued and outstanding Common
Securities are directly owned by Rouse free and clear of any Lien;
(iii) Rouse has been duly qualified as a foreign corporation for
the transaction of business and is in good standing under the laws of
each other jurisdiction in which the failure so to qualify and
maintain good standing would have a material adverse effect on Rouse
and its subsidiaries, taken as a whole, (such counsel being entitled
to rely in respect of the opinion in this clause upon opinions of
local counsel and in respect of matters of fact upon certificates of
officers of Rouse, provided that such counsel shall state that they
believe that both you and they are justified in relying upon such
opinions and certificates);
(iv) Each Significant Subsidiary (as defined below) of Rouse that
is incorporated under the laws of the State of Maryland has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of the State of Maryland; and all of the
issued shares of capital stock or partnership interests of each such
subsidiary have been duly and validly authorized and issued, are
fully paid and non-assessable, and are owned (with exceptions that
are not material to Rouse and its subsidiaries, taken as a whole)
directly or indirectly by Rouse, free and clear of all Liens except
(i) Liens relating to debt which has been disclosed specifically,
generally or in the aggregate in the Prospectus or incurred after the
date of the latest audited financial statements included or
incorporated by reference in the Prospectus in the ordinary course of
business (including financings),
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(ii) Liens incurred in the ordinary course of business which are not
materially adverse to the operations of Rouse and its subsidiaries,
taken as a whole, or (iii) restrictions on the transfer or use of the
stock of any corporate subsidiary under any partnership, joint
venture agreements or lease agreements to which Rouse or any of its
subsidiaries is a party (such counsel being entitled to rely in
respect of the opinion in this clause upon opinions of local counsel
and in respect to matters of fact upon certificates of officers of
Rouse or its subsidiaries, provided that such counsel shall state
that they believe that both you and they are justified in relying
upon such opinions and certificates); "Significant Subsidiary" is
defined to be any subsidiary of Rouse that holds assets that have a
value, on a current value basis, in excess of 3% of Rouse's Total
Common Stock and Other Shareholders' Equity, on a current value
basis, as reported in Rouse's most recent Annual Report on Form 10-K
or Annual Report to Shareholders;
(v) To the best of such counsel's knowledge and other than as set
forth in the Prospectus, there are no legal or governmental
proceedings pending to which Rouse or any of its subsidiaries is a
party or of which any property of Rouse or any of its subsidiaries is
the subject which are likely, individually or in the aggregate, to
have a material adverse effect on Rouse and its subsidiaries, taken
as a whole, and, to the best of such counsel's knowledge, no such
proceedings are threatened or contemplated by governmental
authorities or threatened by others;
(vi) To the best of such counsel's knowledge, the Trust is not a
party to or bound by any agreement or instrument other than the Trust
Agreement, this Agreement, the Trust Agreement and the agreements and
instruments contemplated by the Trust Agreement and described in the
Prospectus; and to the best of such counsel's knowledge, there are no
legal or governmental proceedings pending to which the Trust is a
party or of which any property of the Trust is the subject and no
such proceedings are threatened or contemplated by governmental
authorities or threatened by others;
(vii) This Agreement has been duly authorized, executed and
delivered by Rouse;
(viii) The Guarantor Agreements each have been duly authorized,
executed and delivered by Rouse and such Agreements constitute valid
and legally binding obligations of Rouse, enforceable in accordance
with their respective terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization and other laws relating to or
affecting creditors' rights and to general equitable principles; the
Subordinated Debentures are entitled to the benefits provided by the
Indenture;
(ix) The issue and sale of the Securities and the Common Securities
by the Trust, the issuance by Rouse of the Guarantee and the
Subordinated Debentures, the compliance by Rouse and the Trust with
all of the provisions of this Agreement, the execution, delivery and
performance by
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Rouse of the Guarantor Agreements, the distribution of the
Subordinated Debentures by the Trust in the circumstances
contemplated by the Trust Agreement and the consummation of the
transactions herein and therein contemplated will not (i) to the best
of such counsel's knowledge, conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan agreement
or other agreement or instrument known to such counsel to which Rouse
or any of its subsidiaries is a party or by which Rouse or any of its
subsidiaries is bound or to which any of the property or assets of
Rouse or any of its subsidiaries is subject, except for such
conflict, breach, violation or default which does not have a material
adverse effect on Rouse and its subsidiaries, taken as a whole, nor
(ii) will such action result in any violation of the provisions of
the Articles of Incorporation (including any articles supplementary
thereto) or By-laws of Rouse or any statute or any order, rule or
regulation known to such counsel of any court or governmental agency
or body having jurisdiction over Rouse or any of its subsidiaries or
any of their properties;
(x) The issue and sale of the Securities and the Common Securities
by the Trust, the compliance by the Trust with all of the provisions
of this Agreement, the purchase of the Subordinated Debentures by the
Trust, the distribution of the Subordinated Debentures by the Trust
in the circumstances contemplated by the Trust Agreement and the
consummation of the transactions contemplated herein and in the Trust
Agreement will not conflict with or result in a breach or violation
of any of the terms or provisions of, or constitute a default under,
any agreement or instrument to which the Trust is a party or by which
the Trust is bound or to which any of the property or assets of the
Trust is subject, nor will such action result in any violation of the
provisions of the Trust Agreement or any statute or any order, rule
or regulation of any court or governmental agency or body having
jurisdiction over the Trust or any of its properties; and, to the
best of such counsel's knowledge, no consent, approval,
authorization, order, registration or qualification of or with any
such court or governmental agency or body is required for the issue
and sale of the Securities and the Common Securities by the Trust,
the purchase of the Subordinated Debentures by the Trust or the
consummation by the Trust of the transactions contemplated by this
Agreement and the Trust Agreement, except the registration under the
Act and the Exchange Act of the Registered Securities, the
qualification of the Trust Agreement, the Indenture and the Guarantee
under the TIA, and such consents, approvals, authorizations,
registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the purchase and
distribution of the Securities by the Underwriters;
(xi) To the best of such counsel's knowledge, no consent, approval,
authorization, order, registration or qualification of or with any
such court or governmental agency or body is required for the issue
of the Guarantee, the issuance and sale of the Subordinated
Debentures, the distribution of the
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Subordinated Debentures by the Trust in the circumstances
contemplated by the Trust Agreement or the consummation by Rouse of
the transactions contemplated herein and in the Guarantor Agreements,
except the registration under the Act of the Registered Securities,
the qualification of the Trust Agreement, the Indenture and the
Guarantee under the TIA, and such consents, approvals,
authorizations, registrations or qualifications as may be required
under state securities or Blue Sky laws in connection with the
purchase and distribution of the Securities by the Underwriters;
(xii) Rouse is not an "investment company" or an entity
"controlled" by an "investment company", as such terms are defined in
the Investment Company Act; and
(xiii) The documents incorporated by reference in the Prospectus
or any further amendment or supplement thereto made by Rouse or the
Trust prior to such Time of Delivery (other than the financial
statements, related notes and schedules and financial data included
therein or omitted therefrom, as to which such counsel need express
no opinion), when they were filed with the Commission, appeared on
their face to be appropriately responsive as to form in all material
respects to the requirements of the Exchange Act and the rules and
regulations of the Commission thereunder; and such counsel has no
reason to believe that any of such documents, when such documents
were so filed, contained an untrue statement of a material fact or
omitted to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which
they were made when such documents were so filed, not misleading; and
(xiv) The Registration Statement and the Prospectus and any
further amendments and supplements thereto made by the Trust or Rouse
prior to such Time of Delivery (other than the financial statements
and related schedules therein and Form T-1, as to which such counsel
need express no opinion) comply as to form in all material respects
with the requirements of the Act and the TIA and the rules and
regulations thereunder; although such counsel does not assume any
responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement or the Prospectus,
such counsel has no reason to believe that, as of its effective date,
the Registration Statement or any further amendment thereto made by
the Trust or Rouse prior to such Time of Delivery (other than the
financial statements, related notes and schedules and other financial
data contained or incorporated by reference therein or omitted
therefrom and Form T-1, as to which such counsel need express no
opinion) contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary
to make the statements therein not misleading or that, as of its
date, the Prospectus or any further amendment or supplement thereto
made by the Trust or Rouse prior to such Time of Delivery (other than
the financial statements, related notes and schedules and other
financial data contained or incorporated by reference therein or
omitted therefrom and Form T-1, as to which such counsel need express
no
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opinion) contained an untrue statement of a material fact or
omitted to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were
made, not misleading or that, as of such Time of Delivery, either the
Registration Statement or the Prospectus or any further amendment or
supplement thereto made by the Trust or Rouse prior to such Time of
Delivery (other than the financial statements, related notes and
schedules and other financial data contained or incorporated by
reference therein or omitted therefrom and Form T-1, as to which such
counsel need express no opinion) contains an untrue statement of a
material fact or omits to state a material fact necessary to make the
statements therein, in the light of the circumstances under which
they were made, not misleading; and such counsel does not know of any
amendment to the Registration Statement required to be filed or of
any contracts or other documents of a character required to be filed
as an exhibit to the Registration Statement or required to be
incorporated by reference into the Prospectus or required to be
described in the Registration Statement or the Prospectus which are
not filed or incorporated by reference or described as required;
(d) Fried, Frank, Harris, Shriver & Jacobson, counsel for the Trust and
Rouse, shall have furnished to you their written opinion (a draft of such
opinion is attached as Annex II(c) hereto), dated such Time of Delivery, in
form and substance satisfactory to you to the effect that:
(i) This Agreement has been duly executed and delivered by the
Trust (as to the due authorization of this Agreement by the Trust,
Fried, Frank, Harris, Shriver & Jacobson may rely on the opinion of
Richards, Layton & Finger);
(ii) The Indenture, the Subordinated Debentures and the Guarantee
each constitute valid and legally binding obligations of Rouse,
enforceable in accordance with their respective terms, subject, as to
enforcement, to bankruptcy, insolvency, fraudulent transfer,
fraudulent conveyance, reorganization, moratorium or other laws now
or hereafter in effect affecting creditors' rights generally, and
general principles of equity (whether such principles are considered
in a proceeding in equity or at law); the Subordinated Debentures are
entitled to the benefits provided by the Indenture; and the Trust
Agreement, the Indenture and the Guarantee conform in all material
respects to the descriptions thereof contained in the Prospectus and
have been duly qualified under the TIA;
(iii) The Securities and the Common Securities conform in all
material respects to the descriptions thereof contained in the
Prospectus;
(iv) To the best of such counsel's knowledge, no consent, approval,
authorization, order, registration or qualification of or with any
such court or governmental agency or body is required for the issue
and sale of the Securities and the Common Securities, the compliance
by the Trust with all
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of the provisions of this Agreement, the purchase by the Trust of the
Subordinated Debentures, the distribution of the Subordinated
Debentures by the Trust in the circumstances contemplated by the
Trust Agreement and the consummation of the transactions contemplated
herein and in the Trust Agreement except the registration under the
Act of the Registered Securities, the qualification of the Trust
Agreement, the Indenture and the Guarantee under the TIA, and such
consents, approvals, authorizations, registrations or qualifications
as may be required under state securities or Blue Sky laws in
connection with the purchase and distribution of the Securities by
the Underwriters;
(v) The statements set forth in the Prospectus under the captions
"Description of the Preferred Securities", "Description of the
Guarantee", "Description of the Junior Subordinated Debentures" and
"Relationship Among the Preferred Securities, Junior Subordinated
Debentures and the Guarantee", insofar as they purport to constitute
a summary of the terms of the securities, documents and instruments
therein described, and under the captions "Certain United States
Federal Income Tax Considerations", insofar as they purport to
describe the provisions of the laws referred to therein, fairly
present the information disclosed therein in all material respects;
(vi) The Trust is not an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in
the Investment Company Act; and
(vii) The Registration Statement and the Prospectus and any
further amendments and supplements thereto made by the Trust or Rouse
prior to such Time of Delivery (other than the financial statements,
related notes and schedules and other financial data contained or
incorporated by reference therein or omitted therefrom and Form T-1,
as to which such counsel need not express an opinion), appear on
their face to be responsive as to form in all material respects to
the requirements of the Act and the TIA and the rules and regulations
thereunder.
In rendering such opinion, such counsel may state that their opinion is
limited to the laws of the State of New York, the Delaware Business Trust
Act and the federal laws of the United States.
(e) Richards, Layton & Finger, special Delaware counsel to the Trust and
Rouse, shall have furnished to you, Rouse and the Trust their written
opinion (a draft of such opinion is attached as Annex II(d) hereto), dated
such Time of Delivery, in form and substance satisfactory to you, to the
effect that:
(i) The Trust has been duly created and is validly existing in good
standing as a business trust under the Delaware Business Trust Act,
and all filings required under the laws of the State of Delaware with
respect to the creation and valid existence of the Trust as a
business trust have been made;
18
<PAGE>
(ii) Under the Delaware Business Trust Act and the Trust Agreement,
the Trust has the power and authority to own property and conduct its
business, all as described in the Prospectus;
(iii) The Trust Agreement constitutes a valid and binding
obligation of Rouse and the Trustees, enforceable against Rouse and
the Trustees in accordance with its terms, and the Expense Agreement
constitutes a valid and binding obligation of Rouse and the Trust,
enforceable against Rouse and the Trust in accordance with its terms,
each subject, as to enforcement, to (A) bankruptcy, insolvency,
moratorium, receivership, liquidation, fraudulent conveyance,
reorganization and other laws of general applicability relating to or
affecting creditors' remedies and rights, (B) general equity
principles, including applicable laws relating to fiduciary duties
(regardless of whether considered or applied in a proceeding at
equity or at law) and (C) the effect of applicable public policy on
the enforceability of provisions relating to indemnification or
contribution;
(iv) Under the Delaware Business Trust Act and the Trust Agreement,
the Trust has the power and authority to (a) execute and deliver, and
to perform its obligations under, this Agreement and (b) issue and
perform its obligations under the Securities and the Common
Securities;
(v) Under the Delaware Business Trust Act and the Trust Agreement,
the execution and delivery by the Trust of this Agreement, and the
performance by the Trust of its obligations hereunder, have been duly
authorized by all necessary action on the part of the Trust; and this
Agreement has been duly authorized by the Trust;
(vi) The Securities have been duly authorized by the Trust and are
duly and validly issued and, subject to the qualifications set forth
therein, fully paid and non-assessable undivided beneficial interests
in the assets of the Trust; the Securityholders, as beneficial owners
of the Trust, will be entitled to the same limitation of personal
liability extended to stockholders of private corporations for profit
organized under the General Corporation Law of the State of Delaware;
provided that such counsel may note that the Securityholders may be
obligated, pursuant to the Trust Agreement, to (a) provide indemnity
and/or security in connection with and pay a sum sufficient to cover
any taxes or governmental charges arising from transfers or exchanges
of Securities certificates and the issuance of replacement Securities
certificates and (b) provide security and/or indemnity in connection
with requests of or directions to the Property Trustee (as defined in
the Trust Agreement) to exercise its rights and powers under the
Trust Agreement;
(vii) The Common Securities have been duly authorized by the Trust
Agreement and are duly and validly issued and represent undivided
beneficial interests in the assets of Trust;
(viii) Under the Delaware Business Trust Act and the Trust
Agreement, the issuance of the Securities and the Common Securities
is not subject to preemptive rights;
19
<PAGE>
(ix) The issuance and sale by the Trust of the Securities and the
Common Securities, the execution, delivery and performance by the
Trust of this Agreement, the consummation by the Trust of the
transactions contemplated thereby and compliance by the Trust with
its obligations hereunder will not violate (a) any of the provisions
of the Certificate of Trust of the Trust or the Trust Agreement, or
(b) any applicable Delaware law or administrative regulation;
(x) Assuming that the Trust derives no income from or connected
with sources within the State of Delaware and has no assets,
activities (other than having a Delaware trustee as required by the
Delaware Business Trust Act and the filing of documents with the
Secretary of State of the State of Delaware) or employees in the
State of Delaware, no authorization, approval, consent or order of
any Delaware court or governmental authority or agency is required to
be obtained by the Trust solely in connection with the issuance and
sale of the Securities and the Common Securities; and
(xi) Assuming that the Trust derives no income from or connected
with sources within the State of Delaware and has no assets,
activities (other than having a Delaware trustee as required by the
Delaware Business Trust Act and the filing of documents with the
Secretary of State of the State of Delaware) or employees in the
State of Delaware, and assuming that the Trust is treated as a
grantor trust or partnership for federal income tax purposes, the
Securityholders (other than those holders of the Securities who
reside or are domiciled in the State of Delaware) will have no
liability for income taxes imposed by the State of Delaware solely as
a result of their participation in the Trust, and the Trust will not
be liable for any income tax imposed by the State of Delaware.
In rendering the opinion expressed in this paragraph (e), such counsel need
express no opinion concerning the securities laws of the State of Delaware.
(f) Piper & Marbury, special Maryland counsel for the Trust and Rouse,
shall have furnished to you their written opinion (a draft of such opinion
is attached as Annex II(e) hereto), dated such Time of Delivery, in form
and substance satisfactory to you, to the effect that:
(i) The Guarantor Agreements each have been duly authorized,
executed and delivered by Rouse; and
(ii) The issue and sale of the Securities and the Common
Securities by the Trust will not require a consent or approval of any
holder of Rouse's capital stock or result in any violation of the
provisions of the Articles of Incorporation (including any articles
supplementary thereto) or By-laws of Rouse.
(g) On the date of the Prospectus at a time prior to the execution of
this Agreement, at 10:00 a.m., New York City time, on the effective date of
any post-effective amendment to the Registration Statement filed subsequent
to the date of this Agreement and also at each Time of Delivery, KPMG Peat
Marwick LLP shall have furnished to you a letter or letters, dated the
respective dates of delivery
20
<PAGE>
thereof, in form and substance satisfactory to you, to the effect set forth
in Annex I hereto (the executed copy of the letter delivered prior to the
execution of this Agreement is attached as Annex I(a) hereto and a draft of
the form of letter to be delivered on the effective date of any post-
effective amendment to the Registration Statement and as of each Time of
Delivery is attached as Annex I(b) hereto);
(h) The Trust Agreement, the Guarantee and the Indenture shall have been
executed and delivered, in each case in a form reasonably satisfactory to
you;
(i) (i) Neither the Trust nor Rouse and its subsidiaries, taken as a
whole, shall have sustained since the date of the latest audited financial
statements included or incorporated by reference in the Prospectus any
material loss or interference with its business from fire, explosion, flood
or other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise than as
set forth or contemplated in the Prospectus, and (ii) since the respective
dates as of which information is given in the Prospectus, there shall not
have been any change in the capital stock (other than issuances of capital
stock pursuant to bonus stock awards granted in the ordinary course of
business or upon exercise of options and stock appreciation rights and upon
conversion of convertible securities, in each case, except with respect to
bonus stock awards granted in the ordinary course of business, which were
outstanding as of the date of the latest audited financial statements
included or incorporated by reference in the Prospectus) or any material
adverse change in the long-term debt of Rouse and its subsidiaries, taken
as a whole, or any material adverse change, or any development involving a
prospective material adverse change, in or affecting the general affairs,
management, financial position or securityholders' equity of the Trust, or
the general affairs, management, current value basis shareholders' equity
or results of operations (based on earnings before depreciation and
deferred taxes from operations) of Rouse and its subsidiaries, taken as a
whole, otherwise than as set forth or contemplated in the Prospectus, the
effect of which, in any such case described in Clause (i) or (ii), is in
the reasonable judgment of the Representatives so material and adverse as
to make it impracticable or inadvisable to proceed with the public offering
or the delivery of the Securities being delivered at such Time of Delivery
on the terms and in the manner contemplated in the Prospectus;
(j) On or after the date hereof (i) no downgrading shall have occurred in
the rating accorded the Securities or any of Rouse's debt securities or
preferred stock by any "nationally recognized statistical rating
organization", as that term is defined by the Commission for purposes of
Rule 436(g)(2) under the Act, and (ii) no such organization shall have
publicly announced that it has under surveillance or review, with possible
negative implications, its rating of any of the Securities or any of
Rouse's debt securities or preferred stock;
(k) On or after the date hereof there shall not have occurred any of the
following: (i) a suspension or material limitation in trading in securities
generally on the New York Stock Exchange; (ii) a general moratorium on
commercial banking activities declared by either federal or New York State
authorities; or (iii) the outbreak or escalation of hostilities involving
the United States or the declaration by the United States of a national
emergency or war, if the effect of any such event
21
<PAGE>
specified in this Clause (iii) in the reasonable judgment of the
Representatives makes it impracticable or inadvisable to proceed with the
public offering or the delivery of the Securities being delivered at such
Time of Delivery on the terms and in the manner contemplated in the
Prospectus;
(l) The Securities to be sold by the Trust at such Time of Delivery shall
have been duly listed, subject to notice of issuance, on the New York Stock
Exchange;
(m) The Company shall have complied with the provisions of Section 5(c)
hereof with respect to the furnishing of Prospectuses on the New York
Business Day next succeeding the date of this Agreement; and
(n) The Trust and Rouse shall have furnished or caused to be furnished to
you at such Time of Delivery certificates of officers of Rouse and the
Trust satisfactory to you as to the accuracy of the representations and
warranties of the Trust and Rouse herein at and as of such Time of
Delivery, as to the performance by the Trust and Rouse of all their
obligations hereunder to be performed at or prior to such Time of Delivery,
as to the matters set forth in subsections (a) and (i) of this Section and
as to such other matters as you may reasonably request.
8. (a) The Trust and Rouse, jointly and severally, will indemnify and hold
harmless each Underwriter against any losses, claims, damages or liabilities,
joint or several, to which such Underwriter may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and will reimburse each Underwriter for
any legal or other expenses reasonably incurred by such Underwriter in
connection with investigating or defending any such action or claim as such
expenses are incurred; provided, however, that neither the Trust nor Rouse shall
be liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in any Preliminary Prospectus,
the Registration Statement or the Prospectus, or any amendment or supplement
thereto in reliance upon and in conformity with written information furnished to
the Trust and Rouse by any Underwriter through Goldman, Sachs & Co. expressly
for use therein.
(b) Each Underwriter will indemnify and hold harmless the Trust and Rouse
against any losses, claims, damages or liabilities to which the Trust or Rouse
may become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, the Registration Statement or the
Prospectus, or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
in each case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was made in any
Preliminary Prospectus, the Registration Statement or the Prospectus, or any
amendment or
22
<PAGE>
supplement thereto in reliance upon and in conformity with written information
furnished to the Trust and Rouse by such Underwriter through Goldman, Sachs &
Co. expressly for use therein; and will reimburse the Trust and Rouse for any
legal or other expenses reasonably incurred by the Trust or Rouse in connection
with investigating or defending any such action or claim as such expenses are
incurred.
(c) Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability under such subsection which it may have to any
indemnified party unless and to the extent the indemnifying party is actually
prejudiced by such omission or failure. In case any such action shall be
brought against any indemnified party and it shall notify the indemnifying party
of the commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and,
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal expenses of
other counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation. If the indemnifying party does not assume the defense
of such action, it is understood that the indemnifying party shall not, in
connection with any one such action or separate but substantially similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the fees and expenses of more than
one separate firm of attorneys (in addition to one separate firm of local
attorneys in each such jurisdiction) at any time for all such indemnified
parties, which firms shall be designated in writing by you, if the indemnified
parties under this Section consist of any Underwriter or any of their respective
controlling persons, or by the Trust or Rouse, if the indemnified parties under
this Section consist of the Trust or Rouse or any of their directors, officers,
administrative trustees or controlling persons. The indemnifying party shall
not be liable for any settlement of an action or claim for monetary damages
which an indemnified party may effect without the consent of the indemnifying
party, which consent shall not be unreasonably withheld. No indemnifying party
shall, without the written consent of the indemnified party, effect the
settlement or compromise of, or consent to the entry of any judgment with
respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified party is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment (i) includes an unconditional
release of the indemnified party from all liability arising out of such action
or claim and (ii) does not include a statement as to, or an admission of, fault,
culpability or a failure to act, by or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 8 is unavailable to
or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above in respect of any losses, claims, damages or liabilities (or actions
in respect thereof) referred
23
<PAGE>
to therein, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is appropriate
to reflect the relative benefits received by the Trust and Rouse on the one hand
and the Underwriters on the other from the offering of the Securities. If,
however, the allocation provided by the immediately preceding sentence is not
permitted by applicable law or if the indemnified party failed to give the
notice required under subsection (c) above, then each indemnifying party shall
contribute to such amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of the Trust and Rouse on the one hand and the Underwriters
on the other in connection with the statements or omissions which resulted in
such losses, claims, damages or liabilities (or actions in respect thereof), as
well as any other relevant equitable considerations. The relative benefits
received by the Trust and Rouse on the one hand and the Underwriters on the
other shall be deemed to be in the same proportion as the total net proceeds
from the offering (before deducting expenses) received by the Trust and Rouse
bear to the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Trust and Rouse on the one hand or the Underwriters on the other
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Trust, Rouse
and the Underwriters agree that it would not be just and equitable if
contributions pursuant to this subsection (d) were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this subsection (d). The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages or liabilities (or actions in respect thereof) referred to above in this
subsection (d) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any such action or claim. Notwithstanding the provisions of this subsection (d),
no Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations in
this subsection (d) to contribute are several in proportion to their respective
underwriting obligations and not joint.
(e) The obligations of the Trust and Rouse under this Section 8 shall be in
addition to any liability which the Trust and Rouse may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who controls
any Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section 8 shall be in addition to any liability which
the respective Underwriters may otherwise have and shall extend, upon the same
terms and conditions, to each officer and director of
24
<PAGE>
Rouse, each administrative trustee of the Trust and to each person, if any, who
controls the Trust or Rouse within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to purchase the
Securities which it has agreed to purchase hereunder at a Time of Delivery,
Goldman, Sachs & Co. may in their discretion arrange for Goldman, Sachs & Co. or
another party or other parties to purchase such Securities on the terms
contained herein. If within thirty-six hours after such default by any
Underwriter Goldman, Sachs & Co. do not arrange for the purchase of such
Securities, then Rouse shall be entitled to a further period of thirty-six hours
within which to procure another party or other parties satisfactory to Goldman,
Sachs & Co. to purchase such Securities on such terms. In the event that,
within the respective prescribed periods, Goldman, Sachs & Co. notify Rouse that
Goldman, Sachs & Co. have so arranged for the purchase of such Securities, or
the Trust or Rouse notifies Goldman, Sachs & Co. that it has so arranged for the
purchase of such Securities, Goldman, Sachs & Co. or Rouse shall have the right
to postpone such Time of Delivery for a period of not more than seven days, in
order to effect whatever changes may thereby be made necessary in the
Registration Statement or the Prospectus, or in any other documents or
arrangements, and the Trust and Rouse agree to file promptly any amendments to
the Registration Statement or the Prospectus which in Goldman, Sachs & Co.'s
opinion may thereby be made necessary. The term "Underwriter" as used in this
Agreement shall include any person substituted under this Section with like
effect as if such person had originally been a party to this Agreement with
respect to such Securities.
(b) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Underwriter or Underwriters by Goldman, Sachs & Co.
and Rouse as provided in subsection (a) above, the aggregate number of such
Securities which remains unpurchased does not exceed one-eleventh of the
aggregate number of all the Securities to be purchased at such Time of Delivery,
then Rouse shall have the right to require each non-defaulting Underwriter to
purchase the number of Securities which such Underwriter agreed to purchase
hereunder at such Time of Delivery and, in addition, to require each non-
defaulting Underwriter to purchase its pro rata share (based on the number of
Securities which such Underwriter agreed to purchase hereunder) of the
Securities of such defaulting Underwriter or Underwriters for which such
arrangements have not been made; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Underwriter or Underwriters by Goldman, Sachs & Co.
and Rouse as provided in subsection (a) above, the aggregate number of such
Securities which remains unpurchased exceeds one-eleventh of the aggregate
number of all the Securities to be purchased at such Time of Delivery, or if
Rouse shall not exercise the right described in subsection (b) above to require
non-defaulting Underwriters to purchase Securities of a defaulting Underwriter
or Underwriters, then this Agreement (or, with respect to the Second Time of
Delivery, the obligations of the Underwriters to purchase and of the Trust and
Rouse to sell the Optional Securities) shall thereupon terminate, without
liability on the part of any non-defaulting Underwriter, the Trust or Rouse,
except for the expenses to be borne by Rouse and the Underwriters as provided in
Section 6 hereof and the indemnity and contribution agreements in Section 8
hereof; but nothing herein shall relieve a defaulting Underwriter from liability
for its default.
25
<PAGE>
10. The respective indemnities, agreements, representations, warranties
and other statements of the Trust, Rouse and the several Underwriters, as set
forth in this Agreement or made by or on behalf of them, respectively, pursuant
to this Agreement, shall remain in full force and effect regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or any controlling person of any Underwriter, or the Trust,
Rouse or any officer, director, administrative trustee or controlling person of
the Trust or Rouse, and shall survive delivery of and payment for the
Securities.
11. If this Agreement shall be terminated pursuant to Section 9 hereof,
neither the Trust nor Rouse shall then be under any liability to any Underwriter
except as provided in Sections 6 and 8 hereof; but, if for any other reason any
Securities are not delivered by or on behalf of the Trust as provided herein,
the Trust and Rouse will reimburse the Underwriters through Goldman, Sachs & Co.
for all out-of-pocket expenses approved in writing by you, including fees and
disbursements of counsel, reasonably incurred by the Underwriters in making
preparations for the purchase, sale and delivery of the Securities not so
delivered, but the Trust and Rouse shall then be under no further liability to
any Underwriter except as provided in Sections 6 and 8 hereof.
12. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you jointly or by Goldman, Sachs & Co. on behalf of you as the
Representatives.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters, shall be delivered or sent by mail, telex
or facsimile transmission to you as the Representatives in care of Goldman,
Sachs & Co., 85 Broad Street, New York, New York 10004, Attention: Registration
Department; and if to the Trust or Rouse shall be sufficient in all respects
when delivered or sent by facsimile transmission or registered mail to The Rouse
Company, 10275 Little Patuxent Parkway, Columbia, Maryland 21044-3456,
Attention: Treasurer, with a copy to the General Counsel, Facsimile Transmission
No. (410) 992-6392; provided, however, that any notice to an Underwriter
pursuant to Section 8(c) hereof shall be delivered or sent by mail, telex or
facsimile transmission to such Underwriter at its address set forth in its
Underwriters' Questionnaire, or telex constituting such Questionnaire, which
address will be supplied to the Trust and Rouse by you upon request. Any such
statements, requests, notices or agreements shall take effect upon receipt
thereof.
13. This Agreement shall be binding upon, and inure solely to the benefit
of, the Underwriters, the Trust, Rouse and, to the extent provided in Sections 8
and 10 hereof, the officers, directors and administrative trustees of the Trust,
Rouse and each person who controls the Trust, Rouse or any Underwriter, and
their respective heirs, executors, administrators, successors and assigns, and
no other person shall acquire or have any right under or by virtue of this
Agreement. No purchaser of any of the Securities from any Underwriter shall be
deemed a successor or assign by reason merely of such purchase.
14. Time shall be of the essence of this Agreement. As used herein, the
term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
26
<PAGE>
15. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
16. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument.
If the foregoing is in accordance with your understanding, please sign and
return to us one for the Trust, Rouse and each of the Representatives plus one
for each counsel counterparts hereof, and upon the acceptance hereof by you, on
behalf of each of the Underwriters, this letter and such acceptance hereof shall
constitute a binding agreement between each of the Underwriters and the Trust
and Rouse. It is understood that your acceptance of this letter on behalf of
each of the Underwriters is pursuant to the authority set forth in a form of
Agreement among Underwriters, the form of which shall be submitted to the Trust
and Rouse for examination upon request, but without warranty on your part as to
the authority of the signers thereof.
Very truly yours,
Rouse Capital
By: The Rouse Company, as Depositor
By: . . . . . . . . . . . . . . . . .
Name:
Title:
The Rouse Company
By: . . . . . . . . . . . . . . . . .
Name:
Title:
27
<PAGE>
Accepted as of the date hereof:
Goldman, Sachs & Co.
Alex. Brown & Sons Incorporated
Lehman Brothers Inc.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Smith Barney Inc.
By: . . . . . . . . . . . . . . . . .
(Goldman, Sachs & Co.)
On behalf of each of the Underwriters
28
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE I
Number of
Optional
Securities to be
Total Number of Purchased if
Firm Securities Maximum Option
Underwriter to be Purchased Exercised
----------- --------------- ----------------
<S> <C> <C>
Goldman, Sachs & Co. ...................
Alex. Brown & Sons Incorporated ........
Lehman Brothers Inc. ...................
Merrill Lynch, Pierce, Fenner & Smith
Incorporated ..........................
Smith Barney Inc. ......................
--------------- ----------------
Total
=============== ================
</TABLE>
29
<PAGE>
ANNEX I
Pursuant to Section 7(g) of the Underwriting Agreement, the accountants shall
furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect to
Rouse and its subsidiaries within the meaning of the Act and the applicable
published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any supplementary
financial information and schedules (and, if applicable, financial
forecasts and/or pro forma financial information) examined by them and
included or incorporated by reference in the Registration Statement or the
Prospectus comply as to form in all material respects with the applicable
accounting requirements of the Act or the Exchange Act, as applicable, and
the related published rules and regulations thereunder; and, if applicable,
they have made a review in accordance with standards established by the
American Institute of Certified Public Accountants of the consolidated
interim financial statements, selected financial data, pro forma financial
information, financial forecasts and/or condensed financial statements
derived from audited financial statements of Rouse for the periods
specified in such letter, as indicated in their reports thereon, copies of
which have been separately furnished to the representatives of the
Underwriters (the "Representatives");
(iii) They have made a review in accordance with standards established
by the American Institute of Certified Public Accountants of the unaudited
condensed consolidated statements of income, consolidated balance sheets
and consolidated statements of cash flows included in the Prospectus and/or
included in Rouse's quarterly report on Form 10-Q incorporated by reference
into the Prospectus as indicated in their reports thereon copies of which
have been separately furnished to the Representatives; and on the basis of
specified procedures including inquiries of officials of Rouse who have
responsibility for financial and accounting matters regarding whether the
unaudited condensed consolidated financial statements referred to in
paragraph (vi)(A)(i) below comply as to form in all material respects with
the applicable accounting requirements of the Act and the Exchange Act and
the related published rules and regulations, nothing came to their
attention that caused them to believe that the unaudited condensed
consolidated financial statements do not comply as to form in all material
respects with the applicable accounting requirements of the Act and the
Exchange Act and the related published rules and regulations;
(iv) The unaudited selected financial information with respect to the
consolidated results of operations and financial position of Rouse for the
five most recent fiscal years included in the Prospectus and included or
incorporated by reference in Item 6 of Rouse's Annual Report on Form 10-K
for the most recent fiscal year agrees with the corresponding amounts
(after restatement where applicable) in the audited consolidated financial
statements for such five fiscal years which were included or incorporated
by reference in Rouse's Annual Reports on Form 10-K for such fiscal years;
(v) They have compared the information in the Prospectus under selected
captions with the disclosure requirements of Regulation S-K and on the
basis of limited procedures specified in such letter nothing came to their
attention as a result of the foregoing procedures that caused them to
believe that this information does not conform in all material
<PAGE>
respects with the disclosure requirements of Items 301, 302, 402 and
503(d), respectively, of Regulation S-K;
(vi) On the basis of limited procedures, not constituting an examination
in accordance with generally accepted auditing standards, consisting of a
reading of the unaudited financial statements and other information
referred to below, a reading of the latest available interim financial
statements of Rouse and its subsidiaries, inspection of the minute books of
Rouse and its subsidiaries since the date of the latest audited financial
statements included or incorporated by reference in the Prospectus,
inquiries of officials of Rouse and its subsidiaries responsible for
financial and accounting matters and such other inquiries and procedures as
may be specified in such letter, nothing came to their attention that
caused them to believe that:
(A) (i) the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus and/or included or incorporated by
reference in Rouse's Quarterly Reports on Form 10-Q incorporated by
reference in the Prospectus do not comply as to form in all material
respects with the applicable accounting requirements of the Exchange
Act and the related published rules and regulations, or (ii) any
material modifications should be made to the unaudited condensed
consolidated statements of income, consolidated balance sheets and
consolidated statements of cash flows included in the Prospectus or
included in Rouse's Quarterly Reports on Form 10-Q incorporated by
reference in the Prospectus, for them to be in conformity with
generally accepted accounting principles;
(B) any other unaudited income statement data and balance sheet
items included in the Prospectus do not agree with the corresponding
items in the unaudited consolidated financial statements from which
such data and items were derived, and any such unaudited data and
items were not determined on a basis substantially consistent with
the basis for the corresponding amounts in the audited consolidated
financial statements included or incorporated by reference in Rouse's
Annual Report on Form 10-K for the most recent fiscal year;
(C) the unaudited financial statements which were not included in
the Prospectus but from which were derived the unaudited condensed
financial statements referred to in Clause (A) and any unaudited
income statement data and balance sheet items included in the
Prospectus and referred to in Clause (B) were not determined on a
basis substantially consistent with the basis for the audited
financial statements included or incorporated by reference in Rouse's
Annual Report on Form 10-K for the most recent fiscal year;
(D) any unaudited pro forma consolidated condensed financial
statements included or incorporated by reference in the Prospectus do
not comply as to form in all material respects with the applicable
accounting requirements of the Act and the published rules and
regulations thereunder or the pro forma adjustments have not been
properly applied to the historical amounts in the compilation of
those statements;
(E) as of a specified date not more than five days prior to the
date of such letter, there have been any changes in the consolidated
capital stock (other than
2
<PAGE>
issuances of capital stock upon exercise of options and stock
appreciation rights, upon earn-outs of performance shares and upon
conversions of convertible securities, in each case which were
outstanding on the date of the latest balance sheet included or
incorporated by reference in the Prospectus) or any increase in
excess of 1% in the consolidated long-term debt of Rouse and its
subsidiaries, or any decreases in consolidated net current assets or
stockholders' equity or other items specified by the Representatives,
or any increases in any items specified by the Representatives, in
each case as compared with amounts shown in the latest balance sheet
included or incorporated by reference in the Prospectus, except in
each case for changes, increases or decreases which the Prospectus
discloses have occurred or may occur or which are described in such
letter; and
(F) for the period from the date of the latest financial statements
included or incorporated by reference in the Prospectus to the
specified date referred to in Clause (E) there were any decreases in
consolidated earnings before depreciation and deferred taxes from
operations or other items specified by the Representatives, or any
increases in any items specified by the Representatives, in each case
as compared with the comparable period of the preceding year and with
any other period of corresponding length specified by the
Representatives, except in each case for increases or decreases which
the Prospectus discloses have occurred or may occur or which are
described in such letter; and
(vii) In addition to the examination referred to in their report(s)
included or incorporated by reference in the Prospectus and the limited
procedures, inspection of minute books, inquiries and other procedures
referred to in paragraphs (iii) and (vi) above, they have carried out
certain specified procedures, not constituting an examination in accordance
with generally accepted auditing standards, with respect to certain
amounts, percentages and financial information specified by the
Representatives which are derived from the general accounting records of
Rouse and its subsidiaries, which appear in the Prospectus (excluding
documents incorporated by reference) or in Part II of, or in exhibits and
schedules to, the Registration Statement specified by the Representatives
or in documents incorporated by reference in the Prospectus specified by
the Representatives, and have compared certain of such amounts, percentages
and financial information with the accounting records of Rouse and its
subsidiaries and have found them to be in agreement.
3
<PAGE>
EXHIBIT 4.2
DRAFT 11/17/95
================================================================================
AMENDED AND RESTATED
TRUST AGREEMENT
among
THE ROUSE COMPANY, as Depositor,
and
THE FIRST NATIONAL BANK OF CHICAGO, as Property Trustee,
MICHAEL J. MAJCHRZAK, as Delaware Trustee,
and
THE ADMINISTRATIVE TRUSTEES NAMED HEREIN
Dated as of _________, 1995
ROUSE CAPITAL
================================================================================
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
----
ARTICLE I
Defined Terms
<S> <C> <C>
Section 1.01. Definitions............................................................... 2
<CAPTION>
ARTICLE II
Establishment of the Trust
<S> <C> <C>
Section 2.01. Name...................................................................... 11
Section 2.02. Principal Place of Business of the Trust.................................. 11
Section 2.03. Initial Contribution of Trust Property; Organizational Expenses........... 11
Section 2.04. Issuance of the Preferred Securities...................................... 11
Section 2.05. Subscription and Purchase of Debentures; Issuance of the Common Securities 12
Section 2.06. Declaration of Trust...................................................... 12
Section 2.07. Authorization to Enter into Certain Transactions.......................... 13
Section 2.08. Assets of Trust........................................................... 16
Section 2.09. Title to Trust Property................................................... 17
<CAPTION>
ARTICLE III
Payment Account
<S> <C> <C>
Section 3.01. Payment Account........................................................... 17
<CAPTION>
ARTICLE IV
Distributions; Redemption
<S> <C> <C>
Section 4.01. Distributions............................................................. 17
Section 4.02. Redemption................................................................ 18
Section 4.03. Subordination of Common Securities........................................ 21
Section 4.04. Payment Procedures........................................................ 21
Section 4.05. Tax Returns and Reports................................................... 21
Section 4.06 Payment of Taxes, Duties, Etc. of the Trust............................... 22
Section 4.07 Payments Under Indenture..................................................
</TABLE>
-i-
<PAGE>
<TABLE>
<CAPTION>
Page
----
ARTICLE V
Trust Securities Certificates
<S> <C> <C>
Section 5.01. Initial Ownership......................................................... 22
Section 5.02. The Trust Securities Certificates......................................... 22
Section 5.03. Delivery of Trust Securities Certificates................................. 23
Section 5.04. Registration of Transfer and Exchange of Preferred Securities Certificates 23
Section 5.05. Mutilated, Destroyed, Lost or Stolen Trust Securities Certificates........ 24
Section 5.06. Persons Deemed Securityholders............................................ 24
Section 5.07. Access to List of Securityholders' Names and Addresses.................... 24
Section 5.08. Maintenance of Office or Agency........................................... 25
Section 5.09. Appointment of Paying Agent............................................... 25
Section 5.10. Ownership of Common Securities by Depositor............................... 26
Section 5.11. Book-Entry Interests; Common Securities Certificate....................... 26
Section 5.12. Notices to Clearing Agency................................................ 27
Section 5.13. Definitive Preferred Securities Certificates.............................. 27
Section 5.14. Rights of Securityholders................................................. 28
</TABLE>
<TABLE>
<CAPTION>
ARTICLE VI
Acts of Securityholders; Meetings; Voting
<S> <C> <C>
Section 6.01. Limitations on Voting Rights............................................. 28
Section 6.02. Notice of Meetings....................................................... 29
Section 6.03. Meetings of Preferred Securityholders.................................... 29
Section 6.04. Voting Rights............................................................ 30
Section 6.05. Proxies, Etc............................................................. 30
Section 6.06. Securityholder Action by Written Consent................................. 30
Section 6.07. Record Date for Voting and Other Purposes................................ 31
Section 6.08. Acts of Securityholders.................................................. 31
Section 6.09. Inspection of Records.................................................... 32
</TABLE>
-ii-
<PAGE>
<TABLE>
<CAPTION>
Page
----
ARTICLE VII
Representations and Warranties of the Bank,
the Property Trustee, the Administrative Trustees
and the Delaware Trustee
ARTICLE VIII
The Trustees
<S> <C> <C>
Section 8.01. Certain Duties and Responsibilities...................................... 34
Section 8.02. Notice of Defaults....................................................... 35
Section 8.03. Certain Rights of Property Trustee....................................... 35
Section 8.04. Not Responsible for Recitals or Issuance of Securities................... 37
Section 8.05. May Hold Securities...................................................... 37
Section 8.06. Compensation; Fees; Indemnity............................................ 37
Section 8.07. Corporate Property Trustee Required; Eligibility of Trustees............. 37
Section 8.08. Conflicting Interests.................................................... 38
Section 8.09. Co-Trustees and Separate Trustee......................................... 38
Section 8.10. Resignation and Removal; Appointment of Successor........................ 40
Section 8.11. Acceptance of Appointment by Successor................................... 41
Section 8.12. Merger, Conversion, Consolidation or Succession to Business.............. 42
Section 8.13. Preferential Collection of Claims Against Depositor or Trust............. 42
Section 8.14. Reports by Property Trustee.............................................. 42
Section 8.15. Reports to the Property Trustee.......................................... 43
Section 8.16. Evidence of Compliance with Conditions Precedent......................... 43
Section 8.17. Number of Trustees....................................................... 43
Section 8.18. Delegation of Power...................................................... 44
Section 8.19. Outside Business......................................................... 44
</TABLE>
ARTICLE IX
Termination and Liquidation
<TABLE>
<S> <C> <C>
Section 9.01. Termination Upon Expiration Date......................................... 45
Section 9.02. Early Termination........................................................ 45
Section 9.03. Termination.............................................................. 45
Section 9.04. Liquidation.............................................................. 45
</TABLE>
-iii-
<PAGE>
<TABLE>
<CAPTION>
Page
----
ARTICLE X
Miscellaneous Provisions
<S> <C> <C>
Section 10.01. Limitation of Rights of Securityholders................................. 47
Section 10.02. Amendment............................................................... 49
Section 10.03. Agreement to be Bound................................................... 49
Section 10.04. Separability............................................................ 49
Section 10.05. Governing Law........................................................... 49
Section 10.06. Successors.............................................................. 49
Section 10.07. Headings................................................................ 49
Section 10.08. Notice and Demand....................................................... 49
Section 10.09. Agreement Not to Petition............................................... 50
Section 10.10. Trust Indenture Act; Conflict with Trust Indenture Act.................. 50
</TABLE>
Exhibit A Certificate of Trust
Exhibit B Form of Certificate Depository Agreement
Exhibit C Form of Common Securities Certificate
Exhibit D Form of Expense Agreement
Exhibit E Form of Preferred Securities Certificate
-iv-
<PAGE>
Rouse Capital
Certain Sections of this Trust Agreement relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939:
Trust Indenture Trust Agreement
Act Section Section
- --------------------- ------------------
(S) 310(a)(1) ......................... 8.07
(a)(2) ......................... 8.07
(a)(3) ......................... 8.09
(a)(4) ......................... Not Applicable
(b) ......................... 8.08, 8.10
(S) 311(a) ......................... 8.13
(b) ......................... 8.13
(S) 312(a) ......................... 5.07
(b) ......................... 5.07
(c) ......................... 5.07
(S) 313(a) ......................... 8.14(a)
(b) ......................... 8.14(b)
(c) ......................... 8.14(a), 8.14(b)
(d) ......................... 8.14(c)
(S) 314(a) ......................... 8.15
(b) ......................... Not Applicable
(c)(1) ......................... 8.16
(c)(2) ......................... 8.16
(c)(3) ......................... 8.16
(d) ......................... Not Applicable
(e) ......................... 1.01
(S) 315(a) ......................... 8.01
(b) ......................... 8.02, 8.14(b)
(c) ......................... 8.01(a)
(d) ......................... 8.01, 8.03
(S) 316(a) ......................... Not Applicable
(a)(1)(A) ......................... Not Applicable
(a)(1)(B) ......................... Not Applicable
(a)(2) ......................... Not Applicable
(b) ......................... Not Applicable
(c) ......................... Not Applicable
(S) 317(a)(1) ......................... Not Applicable
-v-
<PAGE>
Trust Indenture Trust Agreement
Act Section Section
- ----------------- ---------------
(a)(2) ......................... Not Applicable
(b) ......................... 5.09
(S) 318(a) ......................... 10.10
Note: This reconciliation and tie shall not, for any purpose, be deemed to
be a part of the Trust Agreement.
-vi-
<PAGE>
AMENDED AND RESTATED TRUST AGREEMENT, dated as of ____________ __,
1995, among (i) The Rouse Company, a Maryland corporation, as depositor (the
"Depositor" or "Rouse"), (ii) The First National Bank of Chicago, a national
banking association, as trustee (the "Property Trustee" and, in its separate
corporate capacity and not in its capacity as Property Trustee, the "Bank"),
(iii) Michael J. Majchrzak, an individual, as Delaware trustee (the "Delaware
Trustee"), (iv) Jeffrey H. Donahue, an individual, Patricia H. Dayton, an
individual, and George L. Yungmann, an individual, each of whose address is c/o
The Rouse Company, 10275 Little Patuxent Parkway, Columbia, Maryland 21044-3456
(each an "Administrative Trustee" and referred to collectively as the
"Administrative Trustees") (the Property Trustee, the Delaware Trustee and the
Administrative Trustees referred to collectively as the "Trustees") and (v) the
several Holders, as hereinafter defined.
WITNESSETH:
----------
WHEREAS, the Depositor, the Property Trustee and the Delaware Trustee
have heretofore duly declared and established a business trust pursuant to the
Delaware Business Trust Act by the entering into of that certain Trust
Agreement, dated as of September 29, 1995 (the "Original Trust Agreement"), and
by the execution and filing by the Property Trustee and the Delaware Trustee
with the Secretary of State of the State of Delaware of the Certificate of
Trust, filed on September 29, 1995, attached as Exhibit A; and
WHEREAS, the Depositor, the Property Trustee and the Delaware Trustee
desire to amend and restate the Original Trust Agreement as set forth herein to
provide for, among other things, (i) the acquisition by the Trust from the
Depositor of all of the right, title and interest in the Debentures (as defined
herein), (ii) the issuance and sale of the Common Securities (as defined herein)
by the Trust to the Depositor, (iii) the issuance and sale of the Preferred
Securities (as defined herein) by the Trust pursuant to the Underwriting
Agreement (as defined herein) and (iv) the appointment of the Administrative
Trustees;
NOW THEREFORE, in consideration of the agreements and obligations set
forth herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, each party, for the benefit of the
other party and for the benefit of the Securityholders (as defined herein),
hereby amends and restates the Original Trust Agreement in its entirety and
agrees as follows:
<PAGE>
ARTICLE I
Defined Terms
Section 1.01. Definitions. For all purposes of this Trust Agreement,
-----------
except as otherwise expressly provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(b) all other terms used herein that are defined in the Trust
Indenture Act (as defined herein), either directly or by reference therein,
have the meanings assigned to them therein;
(c) unless the context otherwise requires, any reference to an
"Article" or a "Section" refers to an Article or a Section, as the case may
be, of this Trust Agreement; and
(d) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Trust Agreement as a whole and not to any
particular Article, Section or other subdivision.
"Act" has the meaning specified in Section 6.08.
---
"Additional Amount" means, with respect to Trust Securities of a given
-----------------
Liquidation Amount (as defined herein) and/or a given period, the amount of
Additional Interest Attributable to Deferral (as defined in the Subordinated
Indenture) paid by the Depositor on a Like Amount of Debentures for such period.
"Administrative Trustee" means each of the individuals identified as
----------------------
an "Administrative Trustee" in the preamble to this Trust Agreement solely in
his or her capacity as Administrative Trustee of the Trust heretofore formed and
continued hereunder and not in his or her individual capacity, or such
Administrative Trustee's successor in interest in such capacity, or any
successor Administrative Trustee appointed as herein provided.
"Affiliate" of any specified Person (as defined herein) means any
---------
other Person directly or indirectly controlling or controlled by or under direct
or indirect common control with such specified Person. For the purposes of this
definition, "control" when used with respect to any specified Person means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
-2-
<PAGE>
"Bank" has the meaning specified in the preamble to this Trust
----
Agreement.
"Bankruptcy Event" means, with respect to any Person:
----------------
(i) a decree or order is entered by a court having jurisdiction in
the premises (a) for relief in respect of such Person in an involuntary
case or proceeding under any of the Bankruptcy Laws or (b) adjudging such
Person a bankrupt or insolvent, or seeking reorganization, arrangement,
adjustment or composition of or in respect of such Person under any of the
Bankruptcy Laws, or appointing a custodian, receiver, liquidator, assignee,
trustee, sequestrator (or other similar official) of such Person or of any
substantial part of any of its properties, or ordering the winding up or
liquidation of any of its affairs, and any such decree or order remains
unstayed and in effect for a period of 60 consecutive days; or
(ii) such Person institutes a voluntary case or proceeding under any
of the Bankruptcy Laws or any other case or proceeding to be adjudicated a
bankrupt or insolvent, or such Person consents to the entry of a decree or
order for relief in respect of such Person in any involuntary case or
proceeding under any of the Bankruptcy Laws or to the institution of
bankruptcy or insolvency proceedings against such Person, or such Person
files a petition or answer or consent seeking reorganization or relief
under any of the Bankruptcy Laws, or consents to the filing of any such
petition or to the appointment of or taking possession by a custodian,
receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of any such Person or of any substantial part of its property, or
makes an assignment for the benefit of creditors, or admits in writing its
inability to pay its debts generally as they become due or takes corporate
action in furtherance of any such action.
"Bankruptcy Laws" has the meaning specified in Section 10.09.
---------------
"Board Resolution" means a copy of a resolution certified by the
----------------
Secretary or an Assistant Secretary of the Depositor to have been duly adopted
by the Depositor's Board of Directors or a duly authorized committee thereof to
be in full force and effect on the date of such certificate and delivered to the
Property Trustee.
"Book-Entry Interest" means a beneficial interest in a Global
-------------------
Certificate, ownership and transfers of which shall be made through book entries
by a Clearing Agency (as defined herein) as described in Section 5.11.
"Business Day" means a day other than (x) a Saturday or a Sunday, (y)
------------
a day on which banks in the State of Maryland or The City of New York are
authorized or
-3-
<PAGE>
obligated by law or executive order to remain closed or (z) a day on which the
Property Trustee's Corporate Trust Office or the Debenture Trustee's principal
corporate trust office is closed for business.
"Certificate Depository Agreement" means the agreement among the Trust
--------------------------------
(as defined herein), the Property Trustee and The Depository Trust Company, as
the initial Clearing Agency, dated as of the Closing Date (as defined herein),
relating to the Trust Certificates, substantially in the form attached as
Exhibit B, as the same may be amended and supplemented from time to time.
"Certificate of Trust" means the Certificate of Trust referred to in
--------------------
the recitals to this Trust Agreement.
"Clearing Agency" means an organization registered as a "clearing
---------------
agency" pursuant to Section 17A of the Securities Exchange Act of 1934, as
amended. The Depository Trust Company will be the initial Clearing Agency.
"Clearing Agency Participant" means a broker, dealer, bank, other
---------------------------
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Date" means the First Time of Delivery as defined in the
------------
Underwriting Agreement (as defined herein), which date is also the date of
execution and delivery of this Trust Agreement.
"Code" means the Internal Revenue Code of 1986, as amended from time
----
to time.
"Commission" means the Securities and Exchange Commission, as from
----------
time to time constituted, created under the Securities Exchange Act of 1934, as
amended, or, if at any time after the execution of this instrument such
Commission is not existing and performing the duties now assigned to it under
the Trust Indenture Act, then the body performing such duties at such time.
"Common Security" means an undivided beneficial interest in the assets
---------------
of the Trust, having a Liquidation Amount of $25 and having the rights provided
therefor in this Trust Agreement, including the right to receive Distributions
and a Liquidation Distribution as provided herein.
"Common Securities Certificate" means a certificate evidencing
-----------------------------
ownership of Common Securities, substantially in the form attached as Exhibit C.
-4-
<PAGE>
"Corporate Trust Office" means the principal office of the Property
----------------------
Trustee located in New York, New York.
"corporation" means a corporation, association, company, including
----------
without limitation, a limited liability company, joint-stock company or business
trust.
"Debenture Event of Default" means an "Event of Default" as defined in
--------------------------
the Subordinated Indenture.
"Debenture Redemption Date" means "Redemption Date" as defined in the
-------------------------
Subordinated Indenture.
"Debenture Trustee" means The First National Bank of Chicago, a
-----------------
national banking association.
"Debentures" means the $_________ aggregate principal amount (or up to
----------
$___________ aggregate principal amount if and to the extent the overallotment
option granted by the Trust to the underwriters of the Preferred Securities is
exercised) of Rouse's ___% Junior Subordinated Debentures due 2025, issued
pursuant to the Subordinated Indenture.
"Definitive Preferred Securities Certificates" means Preferred
--------------------------------------------
Securities Certificates issued in certificated, fully registered form as
provided in Section 5.13.
"Delaware Business Trust Act" means Chapter 38 of Title 12 of the
---------------------------
Delaware Code, 12 Del. C. (S) 3801, et seq., as it may be amended from time to
------- -- ---
time.
"Delaware Trustee" means the individual identified as the "Delaware
----------------
Trustee" in the preamble to this Trust Agreement solely in his capacity as
Delaware Trustee of the Trust formed and continued hereunder and not in his
individual capacity, or his successor in interest in such capacity, or any
successor Delaware Trustee appointed as herein provided.
"Depositor" has the meaning specified in the preamble to this Trust
---------
Agreement and includes Rouse in its capacity as Holder (as defined herein) of
the Common Securities.
"Distribution Date" has the meaning specified in Section 4.01(a).
-----------------
"Distributions" means amounts payable in respect of the Trust
-------------
Securities as provided in Section 4.01.
-5-
<PAGE>
"Event of Default" means the occurrence of a Debenture Event of
----------------
Default (whatever the reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body).
"Exchange Act" means the Securities Exchange Act of 1934, as amended
------------
from time to time.
"Expense Agreement" means the Agreement as to Expenses and Liabilities
-----------------
between Rouse and the Trust, substantially in the form attached as Exhibit D, as
amended from time to time.
"Federal Bankruptcy Code" means the Bankruptcy Act of Title 11 of the
-----------------------
United States Code, as amended from time to time.
"Global Certificate" has the meaning specified in Section 5.11.
------------------
"Guarantee" means the Guarantee Agreement executed and delivered by
---------
Rouse and The First National Bank of Chicago, a national banking association, as
trustee, contemporaneously with the execution and delivery of this Trust
Agreement, for the benefit of the Holders of the Preferred Securities, as
amended from time to time.
"Indemnified Person" has the meaning specified in Article VII.
------------------
"Lien" means any lien, pledge, charge, encumbrance, mortgage, deed of
----
trust, adverse ownership interest, hypothecation, assignment, security interest
or preference, priority or other security agreement or preferential arrangement
of any kind or nature whatsoever.
"Like Amount" means (i) Trust Securities having an aggregate
-----------
Liquidation Amount equal to the principal amount of Debentures to be
contemporaneously redeemed in accordance with the Subordinated Indenture and the
proceeds of which will be used to pay the Redemption Price (as defined herein)
of such Trust Securities, or (ii) Debentures having a principal amount equal to
the aggregate Liquidation Amount of the Trust Securities of the Holder to whom
such Debentures are distributed, as the case may be.
"Liquidation Amount" means the stated liquidation amount of $25 per
------------------
Trust Security.
"Liquidation Date" means the date on which Debentures are to be
----------------
distributed to Holders of Trust Securities in connection with a dissolution and
liquidation of the Trust pursuant to Section 9.04(a).
"Liquidation Distribution" has the meaning specified in Section
------------------------
9.04(d).
-6-
<PAGE>
"Officers' Certificate" means a certificate signed by (i) the
---------------------
Chairman, a Vice Chairman, the President, a Vice President or the Treasurer of
the Depositor and (ii) the Secretary or an Assistant Secretary of the Depositor,
and delivered to the appropriate Trustee; provided, however, that such
-------- -------
certificate may be signed by two of the officers or directors listed in clause
(i) above in lieu of being signed by one of such officers or directors listed in
such clause (i) and one of the officers listed in clause (ii) above. One of the
officers signing an Officers' Certificate given pursuant to Section 8.15 shall
be the principal executive, financial or accounting officer of the Depositor.
Any Officers' Certificate delivered with respect to compliance with a condition
or covenant provided for in this Trust Agreement shall include:
(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers'
Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"Opinion of Counsel" means a written opinion of counsel, who may be
------------------
counsel for the Trust, the Property Trustee or the Depositor, and who shall be
reasonably acceptable to the Property Trustee.
"Original Trust Agreement" has the meaning specified in the recitals
------------------------
to this Trust Agreement.
"Outstanding", when used with respect to Preferred Securities, means,
-----------
as of the date of determination, all Preferred Securities theretofore
authenticated and delivered under this Trust Agreement, except:
------
(i) Preferred Securities theretofore canceled by the Administrative
Trustees or delivered to the Administrative Trustees for cancellation;
(ii) Preferred Securities for whose payment or redemption money in
the necessary amount has been theretofore deposited with the Property
Trustee or any Paying Agent for the Holders of such Preferred Securities;
provided that, if such
--------
-7-
<PAGE>
Preferred Securities are to be redeemed, notice of such redemption has been
duly given pursuant to this Trust Agreement;
(iii) Preferred Securities which have been issued in exchange for
or in lieu of which other Preferred Securities have been authenticated and
delivered pursuant to this Trust Agreement; and
(iv) Preferred Securities exchanged for Debentures pursuant to
Section 9.04;
provided, however, that in determining whether the Holders of the requisite
- -------- -------
aggregate Liquidation Amount of the Outstanding Preferred Securities have given
any request, demand, authorization, direction, notice, consent or waiver
hereunder, Preferred Securities owned by the Depositor, any Trustee or any
Affiliate of the Depositor or any Trustee shall be disregarded and deemed not to
be Outstanding, except that (a) in determining whether any Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Preferred Securities which such Trustee knows to
be so owned shall be so disregarded and (b) the foregoing shall not apply at any
time when all of the Outstanding Preferred Securities are owned by the
Depositor, one or more of the Trustees and/or any such Affiliate. Preferred
Securities so owned which have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Administrative
Trustees the pledgee's right so to act with respect to such Preferred Securities
and that the pledgee is not the Depositor or any Affiliate of the Depositor.
"Owner" means each Person who is the beneficial owner of a Book-Entry
-----
Interest as reflected in the records of the Clearing Agency or, if a Clearing
Agency Participant is not the Owner, then as reflected in the records of a
Person maintaining an account with such Clearing Agency (directly or indirectly,
in accordance with the rules of such Clearing Agency).
"Paying Agent" means any paying agent or co-paying agent appointed
------------
pursuant to Section 5.09 and shall initially be the Bank.
"Payment Account" means a segregated non-interest-bearing corporate
---------------
trust account maintained by the Property Trustee with the Bank in its trust
department for the benefit of the Securityholders in which all amounts paid in
respect of the Debentures will be held and from which the Property Trustee shall
make payments to the Securityholders in accordance with Section 4.01.
"Person" means any individual, corporation, partnership, joint
------
venture, trust, company, including without limitation, a limited liability
company, association,
-8-
<PAGE>
joint stock company, business trust or corporation, unincorporated organization
or government or any agency or political subdivision thereof.
"Preferred Security" means an undivided beneficial interest in the
------------------
assets of the Trust, having a Liquidation Amount of $25 and having the rights
provided therefor in this Trust Agreement, including the right to receive
Distributions and a Liquidation Distribution as provided herein.
"Preferred Securities Certificate" means a certificate evidencing
--------------------------------
ownership of Preferred Securities, substantially in the form attached as Exhibit
E.
"Property Trustee" means the commercial bank or trust company
----------------
identified as the "Property Trustee" in the preamble to this Trust Agreement
solely in its capacity as Property Trustee of the Trust heretofore formed and
continued hereunder and not in its individual capacity, or its successor in
interest in such capacity, or any successor Property Trustee appointed as herein
provided.
"Redemption Date" means, with respect to any Trust Security to be
---------------
redeemed, the date fixed for such redemption by or pursuant to this Trust
Agreement; provided that each Debenture Redemption Date and the stated maturity
--------
of the Debentures shall be a Redemption Date for a Like Amount of Trust
Securities.
"Redemption Price" means, with respect to any Redemption Date of any
----------------
Trust Security, the Liquidation Amount of such Trust Security, plus accumulated
and unpaid Distributions to such date, whether or not earned or declared.
"Relevant Trustee" shall have the meaning specified in Section 8.10.
----------------
"Securities Register" and "Securities Registrar" have the respective
------------------- --------------------
meanings specified in Section 5.04.
"Securityholder" or "Holder" means a Person in whose name a Trust
-------------- ------
Security or Securities is registered in the Securities Register; any such Person
shall be deemed to be a beneficial owner within the meaning of the Delaware
Business Trust Act.
"Subordinated Indenture" means the Indenture, dated as of ________,
----------------------
1995, between Rouse and the Debenture Trustee, as trustee, as amended or
supplemented from time to time.
"Tax Event" means the receipt by the Trust or the Depositor, as the
---------
case may be, of an Opinion of Counsel experienced in such matters to the effect
that, as a result of (a) any amendment to, clarification of, or change
(including any announced prospective change) in, the laws or treaties (or any
regulations thereunder) of the United
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<PAGE>
States or any political subdivision or taxing authority thereof or therein
affecting taxation, or (b) any judicial decision, official administrative
pronouncement, ruling, regulatory procedure, notice or announcement (including
any notice or announcement of intent to adopt such procedures or regulations)
("Administrative Action"), or (c) any amendment to, clarification of, or change
in the official position or the interpretation of such Administrative Action or
judicial decision or any interpretation or pronouncement that provides for a
position with respect to such Administrative Action or judicial decision that
differs from the theretofore generally accepted position, in each case, by any
legislative body, court, governmental authority or regulatory body, irrespective
of the manner in which such amendment, clarification or change is made known,
which amendment, clarification, or change is effective or such pronouncement or
decision is announced on or after the Closing Date, there is more than an
insubstantial risk that (i) the Trust is, or will be, subject to United States
federal income tax with respect to interest received on the Debentures, (ii)
interest payable by the Depositor on the Debentures is not, or will not be,
fully deductible for United States federal income tax purposes, or (iii) the
Trust is, or will be, subject to more than a de minimis amount of other taxes,
duties or other governmental charges.
"Trust" means the Delaware business trust created and continued hereby
-----
and identified on the cover page to this Trust Agreement.
"Trust Agreement" means this Amended and Restated Trust Agreement, as
---------------
the same may be modified, amended or supplemented in accordance with the
applicable provisions hereof, including all exhibits hereto, including, for all
purposes of this Trust Agreement and any such modification, amendment or
supplement, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this Trust Agreement and any such modification, amendment or
supplement, respectively.
"Trustees" has the meaning specified in the preamble to this Trust
--------
Agreement.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in
-------------------
force at the date as of which this instrument was executed; provided, however,
-------- -------
that in the event the Trust Indenture Act of 1939 is amended after such date,
"Trust Indenture Act" means, to the extent required by any such amendment, the
Trust Indenture Act of 1939 as so amended.
"Trust Property" means (i) the Debentures, (ii) any cash on deposit
--------------
in, or owing to, the Payment Account and (iii) all proceeds and rights in
respect of the foregoing and any other property and assets for the time being
held or deemed to be held by the Property Trustee pursuant to the terms of this
Trust Agreement.
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<PAGE>
"Trust Security" means any one of the Common Securities or the
--------------
Preferred Securities.
"Trust Securities Certificate" means any one of the Common Securities
----------------------------
Certificates or the Preferred Securities Certificates.
"Underwriting Agreement" means the Underwriting Agreement, dated as of
----------------------
_________, 1995, among the Trust, Rouse and the underwriters named therein.
ARTICLE II
Establishment of the Trust
Section 2.01. Name. The Trust created and continued hereby shall be
----
known as "Rouse Capital", as such name may be modified from time to time by the
Administrative Trustees following written notice to the Holders of Trust
Securities and the other Trustees, in which name the Trustees may conduct the
business of the Trust, make and execute contracts and other instruments on
behalf of the Trust and sue and be sued.
Section 2.02. Principal Place of Business of the Trust. The
----------------------------------------
principal place of business of the Trust is c/o The Rouse Company, 10275 Little
Patuxent Parkway, Columbia, Maryland 21044-3456.
Section 2.03. Initial Contribution of Trust Property; Organizational
------------------------------------------------------
Expenses. The Property Trustee acknowledges receipt from the Depositor in
- --------
connection with the Original Trust Agreement of the sum of $10, which
constituted the initial Trust Property. The Depositor shall pay organizational
expenses of the Trust as they arise or shall, upon request of any Trustee,
promptly reimburse such Trustee for any such expenses paid by such Trustee. The
Depositor shall make no claim upon the Trust Property for the payment of such
expenses.
Section 2.04. Issuance of the Preferred Securities. On _________,
------------------------------------
1995 the Depositor, on behalf of the Trust and pursuant to the Original Trust
Agreement, executed and delivered the Underwriting Agreement. Contemporaneously
with the execution and delivery of this Trust Agreement, the Administrative
Trustees, on behalf of the Trust, shall execute and deliver Preferred Securities
Certificates, registered in the name of the nominee of the initial Clearing
Agency, in an aggregate amount of _________ Preferred Securities having an
aggregate Liquidation Amount of $ _________ against receipt of the aggregate
purchase price of such Preferred Securities of $__________, which amount the
Administrative Trustees shall promptly deliver to the Property Trustee. In the
event and to the extent the overallotment option granted by the Trust pursuant
to the Underwriting Agreement is exercised, the Administrative Trustees, on
behalf of the
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<PAGE>
Trust, shall execute and deliver Preferred Securities Certificates, registered
in the name of the nominee of the initial Clearing Agency, in an aggregate
amount of up to an additional __________ Preferred Securities having an
aggregate Liquidation Amount of up to $__________ against receipt of the
aggregate purchase price of such Preferred Securities of up to $___________,
which amount the Administrative Trustees shall promptly deliver to the Property
Trustee, on the date specified pursuant to the Underwriting Agreement.
Section 2.05. Subscription and Purchase of Debentures; Issuance of
----------------------------------------------------
the Common Securities. Contemporaneously with the execution and delivery of
- ---------------------
this Trust Agreement, (x) the Administrative Trustees, on behalf of the Trust,
shall subscribe to and purchase from the Depositor Debentures, registered in the
name of the Trust and having an aggregate principal amount equal to
$___________, and, in satisfaction of the purchase price for such Debentures,
the Property Trustee, on behalf of the Trust, shall deliver to the Depositor the
sum of $__________, and (y) the Administrative Trustees, on behalf of the Trust,
shall execute and deliver to the Depositor Common Securities Certificates,
registered in the name of the Depositor, in an aggregate amount of __________
Common Securities having an aggregate Liquidation Amount of $__________ and, in
satisfaction of the purchase price for such Common Securities, the Depositor
shall deliver to the Trust the sum of $__________. In the event the
overallotment option granted by the Trust with respect to the Preferred
Securities pursuant to the Underwriting Agreement is exercised by the
underwriters named therein, (x) the Administrative Trustees, on behalf of the
Trust, shall subscribe to and purchase from the Depositor Debentures, registered
in the name of the Trust and having an aggregate principal amount of up to
$__________, and, in satisfaction of the purchase price for such Debentures, the
Property Trustee, on behalf of the Trust, shall deliver to the Depositor an
amount equal to 100% of the aggregate principal amount of the Debentures being
purchased and (y) contemporaneously therewith, the Administrative Trustees, on
behalf of the Trust, shall execute and deliver to the Depositor Common
Securities Certificates, registered in the name of the Depositor, in an
aggregate amount (determined on a pro rata basis to the extent the overallotment
--- ----
option is exercised) of up to ______ Common Securities having an aggregate
Liquidation Amount of up to $__________ and, in satisfaction of the purchase
price for such Common Securities, the Depositor shall deliver to the Trust an
amount equal to 3% of the aggregate principal amount of the Debentures being
purchased.
Section 2.06. Declaration of Trust. The exclusive purposes of the
--------------------
Trust are (a) to issue and sell Trust Securities, (b) to purchase the Debentures
with the proceeds from the sale of the Preferred Securities and Common
Securities and (c) to engage in those activities necessary or incidental
thereto. The Depositor hereby appoints the Trustees, as trustees of the Trust,
to have all the rights, powers and duties to the extent set forth herein, and
the Trustees hereby accept such appointment. The Property Trustee hereby
declares that it will hold the Trust Property in trust upon and subject to the
conditions set forth herein for the benefit of the Trust and the
Securityholders. The
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<PAGE>
Trustees shall have all rights, powers and duties set forth herein and in
accordance with applicable law with respect to accomplishing the purposes of the
Trust. The Delaware Trustee shall not be entitled to exercise any powers, nor
shall the Delaware Trustee have any of the duties and responsibilities, of the
Property Trustee or the Administrative Trustees set forth herein. The Delaware
Trustee shall be one of the Trustees of the Trust for the sole and limited
purpose of fulfilling the requirements of Section 3807 of the Delaware Business
Trust Act.
Section 2.07. Authorization to Enter into Certain Transactions.
------------------------------------------------
(a) The Trustees shall conduct the affairs of the Trust in accordance
with the terms of this Trust Agreement. Subject to the limitations set forth in
paragraph (c) of this Section, and in accordance with the following provisions
(A) and (B), the Administrative Trustees and the Property Trustee shall have the
authority to enter into all transactions and agreements determined by such
Trustees to be appropriate in exercising the authority, express or implied,
otherwise granted to such Trustees under this Trust Agreement, and to perform
all acts in furtherance thereof, including without limitation, the following:
(A) As among the Trustees, the Administrative Trustees shall have the
power, duty and authority to act on behalf of the Trust with respect to the
following matters:
(i) the issuance and sale of the Trust Securities;
(ii) to cause the Trust to enter into, and to execute, deliver
and perform on behalf of the Trust, the Expense Agreement and the
Certificate Depository Agreement and such other agreements as may be
necessary or desirable in connection with the purposes and function of the
Trust;
(iii) assisting in the registration of the Preferred Securities
under the Securities Act of 1933, as amended, and under state securities or
blue sky laws, and the qualification of this Trust Agreement as a trust
indenture under the Trust Indenture Act;
(iv) assisting in the listing of the Preferred Securities upon
such securities exchange or exchanges as shall be determined by the
Depositor and the registration of the Preferred Securities under the
Exchange Act and the preparation and filing of all periodic and other
reports and other documents pursuant to the foregoing;
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<PAGE>
(v) the sending of notices (other than notices of default) and
other information regarding the Trust Securities and the Debentures to the
Securityholders in accordance with this Trust Agreement;
(vi) the appointment of a Paying Agent, authenticating agent and
Securities Registrar in accordance with this Trust Agreement;
(vii) registering transfers of the Trust Securities in
accordance with this Trust Agreement;
(viii) to the extent provided in this Trust Agreement, the
winding up of the affairs of and liquidation of the Trust and the
preparation, execution and filing of the certificate of cancellation with
the Secretary of State of the State of Delaware;
(ix) unless otherwise determined by the Depositor, the Property
Trustee or the Administrative Trustees, or as otherwise required by the
Delaware Business Trust Act or the Trust Indenture Act, to execute on
behalf of the Trust (either acting alone or together with any or all of the
Administrative Trustees) any documents that the Administrative Trustees
have the power to execute pursuant to this Trust Agreement; and
(x) the taking of any action incidental to the foregoing as the
Trustees may from time to time determine is necessary, advisable or
convenient to give effect to the terms of this Trust Agreement for the
benefit of the Securityholders (without consideration of the effect of any
such action on any particular Securityholder).
(B) As among the Trustees, the Property Trustee shall have the power,
duty and authority to act on behalf of the Trust with respect to the following
matters:
(i) the establishment and maintenance of the Payment Account;
(ii) assisting in the registration of the Preferred Securities
under the Securities Act of 1933, as amended, and under state securities or
blue sky laws, and the qualification of the Trust Agreement as a trust
indenture under this Trust Indenture Act;
(iii) the receipt of the Debentures;
(iv) the collection of interest, principal and any other payments
made in respect of the Debentures in the Payment Account;
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<PAGE>
(v) the distribution of amounts owed to the Securityholders in
respect of the Trust Securities;
(vi) the sending of notices of default and other information
regarding the Trust Securities and the Debentures to the Securityholders in
accordance with this Trust Agreement;
(vii) the distribution of the Trust Property in accordance with
the terms of this Trust Agreement;
(viii) to the extent provided in this Trust Agreement, the
winding up of the affairs of and liquidation of the Trust and the
preparation, execution and filing of the certificate of cancellation with
the Secretary of State of the State of Delaware; and
(ix) the taking of any action incidental to the foregoing as the
Property Trustee may from time to time determine is necessary or advisable
to give effect to the terms of this Trust Agreement and protect and
conserve the Trust Property for the benefit of the Securityholders (without
consideration of the effect of any such action on any particular
Securityholder).
(b) So long as this Trust Agreement remains in effect, the Trust (or
the Trustees acting on behalf of the Trust) shall not undertake any business,
activities or transaction except as expressly provided herein or contemplated
hereby. In particular, the Trustees shall not (i) acquire any investments
(other than the Debentures as provided for herein) or engage in any activities
not authorized by this Trust Agreement, (ii) sell, assign, transfer, exchange,
pledge, set-off or otherwise dispose of any of the Trust Property or interests
therein, including to Securityholders, except as expressly provided herein,
(iii) take any action that would cause the Trust to be deemed an "investment
company" required to be registered under the Investment Company Act of 1940, as
amended, or treated as an association taxable as a corporation for United States
federal income tax purposes, (iv) incur any indebtedness for borrowed money or
(v) take or consent to any action that would result in the placement of a Lien
on any of the Trust Property. The Trustees shall defend all claims and demands
of all Persons at any time claiming any Lien on any of the Trust Property
adverse to the interest of the Trust or the Securityholders in their capacity as
Securityholders.
(c) In connection with the issue and sale of the Preferred Securities,
the Depositor shall have the right and responsibility to assist the Trust with
respect to, or effect on behalf of the Trust, the following (and any actions
taken by the Depositor in furtherance of the following prior to the date of this
Trust Agreement are hereby ratified and confirmed in all respects as actions of
the Trust):
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<PAGE>
(i) to prepare for filing with the Commission a registration
statement on Form S-3 in relation to the Preferred Securities, including
any amendments thereto (and any related registration statement under Rule
462(b) of the Securities Act of 1933, as amended from time to time);
(ii) to determine the States in which to take appropriate action
to qualify or register for sale all or part of the Preferred Securities and
to do any and all such acts, other than actions which must be taken by or
on behalf of the Trust, and advise the Trustees of actions they must take
on behalf of the Trust, and prepare for execution and filing any documents
to be executed and filed by the Trust or on behalf of the Trust, as the
Depositor deems necessary, advisable or convenient in order to comply with
the applicable laws of any such States;
(iii) to prepare for filing by the Trust an application to the
New York Stock Exchange or any other national stock exchange or the Nasdaq
National Market for listing upon notice of issuance of any Preferred
Securities;
(iv) to prepare for filing by the Trust with the Commission a
registration statement on Form 8-A relating to the registration of the
Preferred Securities under Section 12(b) of the Exchange Act, including any
amendments thereto;
(v) to negotiate the terms of, and execute and deliver, the
Underwriting Agreement providing for the sale of the Preferred Securities;
and
(vi) any other actions necessary or desirable to carry out any of
the foregoing activities.
(d) Notwithstanding anything herein to the contrary, the
Administrative Trustees are authorized and directed to conduct the affairs of
the Trust and to operate the Trust so that the Trust will not be deemed to be an
"investment company" required to be registered under the Investment Company Act
of 1940, as amended, or taxed as a corporation for United States federal income
tax purposes and so that the Debentures will be treated as indebtedness of the
Depositor for United States federal income tax purposes. In this connection,
the Depositor and the Administrative Trustees are authorized to take any action,
not inconsistent with applicable law, the Certificate of Trust or this Trust
Agreement, that the Depositor or any of the Administrative Trustees determines
in its discretion to be necessary, desirable or convenient for such purposes, as
long as such action does not adversely affect the interests of the holders of
the Preferred Securities.
Section 2.08. Assets of Trust. The assets of the Trust shall consist
---------------
of the Trust Property.
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<PAGE>
Section 2.09. Title to Trust Property. Legal title to all Trust
-----------------------
Property shall be vested at all times in the Property Trustee (in its capacity
as such) and shall be held and administered by the Property Trustee for the
benefit of the Trust and the Securityholders in accordance with this Trust
Agreement.
ARTICLE III
Payment Account
Section 3.01. Payment Account.
---------------
(a) On or prior to the Closing Date, the Property Trustee shall
establish the Payment Account. The Property Trustee and any agent of the
Property Trustee shall have exclusive control and sole right of withdrawal with
respect to the Payment Account for the purpose of making deposits in and
withdrawals from the Payment Account in accordance with this Trust Agreement.
All monies and other property deposited or held from time to time in the Payment
Account shall be held by the Property Trustee in the Payment Account for the
exclusive benefit of the Securityholders and for distribution as herein
provided, including (and subject to) any priority of payments provided for
herein.
(b) The Property Trustee shall deposit in the Payment Account,
promptly upon receipt, all payments of principal or interest on, and any other
payments or proceeds with respect to, the Debentures. Amounts held in the
Payment Account shall not be invested by the Property Trustee pending
distribution thereof.
ARTICLE IV
Distributions; Redemption
Section 4.01. Distributions.
-------------
(a) Distributions on the Trust Securities shall be cumulative, and
will accumulate whether or not there are funds of the Trust available for the
payment of Distributions. Distributions shall accrue from __________, 1995,
and, except in the event that Rouse exercises its right to extend the interest
payment period for the Debentures pursuant to Section 301 of the Subordinated
Indenture, shall be payable quarterly in arrears on March 31, June 30, September
30 and December 31 of each year, commencing on _____________, 1995. If any date
on which Distributions are otherwise payable on the Trust Securities is not a
Business Day, then the payment of such Distribution shall be made on the next
succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay) except that, if such Business Day is in
the next succeeding calendar year, payment of such Distribution shall be made on
the immediately preceding Business Day, in each case, with the same force and
effect as if
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made on such date (each date on which Distributions are payable in
accordance with this Section 4.01(a) a "Distribution Date").
(b) The Trust Securities represent undivided beneficial interests in
the assets of the Trust, and, subject to Section 4.03 hereof, all Distributions
will be made pro rata on each of the Trust Securities; Distributions payable as
a preference on the Preferred Securities shall be fixed at a rate of __% per
annum of the Liquidation Amount of the Preferred Securities. The amount of
Distributions payable for any full quarterly period shall be computed on the
basis of twelve 30-day months and a 360-day year and, for any period shorter
than a full monthly period, shall be computed on the basis of the actual number
of days elapsed in such period. The amount of Distributions payable for any
period shall include Additional Amounts, if any.
(c) Distributions on the Trust Securities shall be made and shall be
deemed payable on each Distribution Date only to the extent that the Trust has
funds legally and immediately available in the Payment Account for the payment
of such Distributions.
(d) Distributions on the Trust Securities with respect to a
Distribution Date shall be payable to the Holders thereof as they appear on the
Securities Register for the Trust Securities on the relevant record date (the
"Record Date"), which shall be one Business Day prior to such Distribution Date;
provided, however, that in the event that the Preferred Securities do not remain
- -------- -------
in book-entry-only form, the Record Date shall be the date 15 days prior to the
relevant Distribution Date, whether or not a Business Day.
Section 4.02. Redemption.
----------
(a) On each Debenture Redemption Date, the Trust will be required to
redeem a Like Amount of Trust Securities at the Redemption Price.
(b) If (i) a Tax Event shall occur and be continuing and (ii) within
45 days following the occurrence of such Tax Event the Trustees shall not have
received from the Debenture Trustee a notice of redemption of all of the
Debentures on a Debenture Redemption Date (as specified in such notice) which is
to occur not later than 90 days following the occurrence of such Tax Event, the
Depositor may in its sole discretion direct the Trustees to, and the Trustees
shall if so directed by the Depositor, dissolve the Trust and cause the Trust to
distribute in accordance with Section 9.04 to each Holder of Trust Securities,
on a Liquidation Date which shall occur not later than 90 days following the
occurrence of such Tax Event, a Like Amount of Debentures in liquidation of the
Trust; provided, however, that the Trustees shall be required to follow the
-------- -------
direction of the Depositor to dissolve the Trust and distribute the Debentures
to Holders of Trust Securities in accordance with this Section 4.02(b) and
Section 9.04 only
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if the Trust shall have received an Opinion of Counsel experienced in such
matters to the effect that the Holders of Preferred Securities will not
recognize any gain or loss for United States federal income tax purposes as a
result of such distribution. The election of the Depositor to cause the Trust to
be dissolved shall be evidenced by a Board Resolution. If the Trust is not
dissolved pursuant to this Section 4.02 and the Trust Securities remain
Outstanding, then Additional Interest Attributable to Taxes (as defined in the
Subordinated Indenture) will be payable on the Debentures.
(c) Notice of redemption shall be given by the Property Trustee by
first-class mail, postage prepaid, mailed not less than 30 nor more than 60 days
prior to the Redemption Date to each Holder of Trust Securities to be redeemed,
at such Holder's address appearing in the Security Register. All notices of
redemption shall identify the Trust Securities to be redeemed (including CUSIP
number) and shall state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) the place or payment where such Trust Securities are to be
surrendered for payment of the Redemption Price; and
(iv) that on the Redemption Date the Redemption Price will become
due and payable upon each such Trust Security to be redeemed and that
interest thereon will cease to accrue on and after said date.
(d) The Trust Securities redeemed on each Redemption Date shall be
redeemed at the Redemption Price with the proceeds from the contemporaneous
redemption of Debentures. Redemptions of the Trust Securities shall be made and
the Redemption Price shall be deemed payable on each Redemption Date only to the
extent that the Trust has funds legally and immediately available in the Payment
Account for the payment of such Redemption Price.
(e) If the Property Trustee gives a notice of redemption in respect of
any Preferred Securities (which notice will be irrevocable), then, by 12:00
noon, New York time, on the Redemption Date, subject to Section 4.02(d), the
Property Trustee shall, so long as the Preferred Securities are in book-entry-
only form, irrevocably deposit with the Clearing Agency for the Preferred
Securities funds sufficient to pay the applicable Redemption Price and, at the
direction of the Depositor, shall give such Clearing Agency irrevocable
instructions and authority to pay the Redemption Price to the Holders thereof.
If the Preferred Securities are no longer in book-entry-only-form, the Property
Trustee, subject to Section 4.02(d), shall irrevocably deposit with the Paying
Agent funds sufficient to pay the applicable Redemption Price and shall give the
Paying Agent irrevocable instructions to pay the Redemption Price to the Holders
thereof upon
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surrender of their Preferred Securities Certificates. Notwithstanding the
foregoing, Distributions payable on or prior to the Redemption Date for any
Trust Securities called for redemption shall be payable to the Holders of such
Trust Securities as they appear on the Securities Register for the Trust
Securities on the relevant record dates for the related Distribution Dates. If
notice of redemption shall have been given and funds deposited as required, then
upon the date of such deposit, all rights of Securityholders holding Trust
Securities so called for redemption will cease, except the right of such
Securityholders to receive the Redemption Price, but without interest on such
Redemption Price, and such Securities will cease to be Outstanding. In the event
that any date on which any Redemption Price is payable is not a Business Day,
then payment of the Redemption Price payable on such date shall be made on the
next succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay) except that, if such Business Day is in
the next succeeding calendar year, payment of such distribution shall be made on
the immediately preceding Business Day, in each case, with the same force and
effect as if made on such date. In the event that payment of the Redemption
Price in respect of any Trust Securities called for redemption is improperly
withheld or refused and not paid either by the Trust or by the Depositor
pursuant to the Guarantee, Distributions on such Trust Securities will continue
to accrue from the Redemption Date originally established by the Trust for such
Trust Securities to the date such Redemption Price is actually paid, in which
case the actual payment date will be the date fixed for redemption for purposes
of calculating the Redemption Price.
(f) If less than all the Outstanding Trust Securities are to be
redeemed on a Redemption Date, then the aggregate Liquidation Amount of Trust
Securities to be redeemed shall be allocated to the Common Securities and the
Preferred Securities on a pro rata basis based upon their respective aggregate
Liquidation Amount. The particular Preferred Securities to be redeemed shall be
selected not more than 60 days prior to the Redemption Date by the Property
Trustee from the Outstanding Preferred Securities not previously called for
redemption, by such method as the Property Trustee shall deem fair and
appropriate and which may provide for the selection for redemption of portions
(equal to $25 or any integral multiple thereof) of the aggregate Liquidation
Amount of Preferred Securities of a denomination larger than $25. The Property
Trustee shall promptly notify the Securities Registrar in writing of the
Preferred Securities selected for redemption and, in the case of any Preferred
Securities selected for partial redemption, the Liquidation Amount thereof to be
redeemed. For all purposes of this Trust Agreement, unless the context
otherwise requires, all provisions relating to the redemption of Preferred
Securities shall relate, in the case of any Preferred Securities redeemed or to
be redeemed only in part, to the portion of the aggregate Liquidation Amount of
Preferred Securities which has been or is to be redeemed.
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Section 4.03. Subordination of Common Securities.
----------------------------------
(a) Payment of Distributions (including Additional Amounts, if
applicable) on, and the Redemption Price of, the Trust Securities, as
applicable, shall be made pro rata based on the aggregate Liquidation Amount of
--- ----
the Trust Securities; provided, however, that if on any Distribution Date or
-------- -------
Redemption Date a Debenture Event of Default shall have occurred and be
continuing, no payment of any Distribution (including Additional Amounts, if
applicable) on, or Redemption Price of, any Common Security, and no other
payment on account of the redemption, liquidation or other acquisition of Common
Securities, shall be made unless payment in full in cash of all accumulated and
unpaid Distributions (including Additional Amounts, if applicable) payable as a
preference on all Outstanding Preferred Securities for all distribution periods
terminating on or prior thereto, or in the case of payment of the Redemption
Price the full amount of such Redemption Price on all Outstanding Preferred
Securities called for redemption, shall have been made or provided for, and all
funds legally and immediately available to the Property Trustee shall first be
applied to the payment in full in cash of all Distributions (including
Additional Amounts, if applicable) on, or Redemption Price of, Preferred
Securities then due and payable.
(b) In the case of the occurrence of any Debenture Event of Default,
the Holder of Common Securities will be deemed to have waived any right to act
with respect to any Event of Default until the effect of all such Events of
Default with respect to the Preferred Securities have been cured, waived or
otherwise eliminated. Until any such Events of Default under this Trust
Agreement with respect to the Preferred Securities have been so cured, waived or
otherwise eliminated, the Property Trustee shall act solely on behalf of the
Holders of the Preferred Securities and not the Holder of the Common Securities,
and only the Holders of the Preferred Securities will have the right to direct
the Property Trustee to act on their behalf.
Section 4.04. Payment Procedures. Payments in respect of the
------------------
Preferred Securities shall be payable at the office or agency of the Paying
Agent in The City of New York maintained for such purpose and at any other
office or agency maintained by the Paying Agent for such purpose; provided,
--------
however, that at the option of the Property Trustee, Distributions may be made
- -------
by check mailed to the address of the Person entitled thereto as such address
shall appear on the Securities Register; provided further, if the Preferred
-------- -------
Securities are held by a Clearing Agency, payments shall be made to the Clearing
Agency. Payments in respect of the Common Securities shall be made in such
manner as shall be mutually agreed between the Property Trustee and the Common
Securityholder.
Section 4.05. Tax Returns and Reports. The Administrative Trustees
-----------------------
shall prepare (or cause to be prepared), at the Depositor's expense, and file
all United States
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federal, state and local tax and information returns and reports required to be
filed by or in respect of the Trust. In this regard, the Administrative Trustees
shall (a) prepare and file (or cause to be prepared or filed) the Internal
Revenue Service Form 1041 (or any successor form) required to be filed in
respect of the Trust in each taxable year of the Trust and (b) prepare and
furnish (or cause to be prepared and furnished) to each Securityholder the
related Internal Revenue Service Schedule K-1 (Form 1041) Beneficiaries' Share
of Income, Deductions, Etc., or any successor form or the information required
to be provided on such form. The Administrative Trustees shall provide the
Depositor and the Property Trustee with a copy of all such returns, reports and
schedules promptly after such filing or furnishing. The Trustees shall comply
with United States federal withholding and backup withholding tax laws and
information reporting requirements with respect to any payments to
Securityholders under the Trust Securities.
Section 4.06. Payment of Taxes, Duties, Etc. of the Trust. Upon
-------------------------------------------
receipt under the Debentures of Additional Interest Attributable to Taxes (as
defined in the Subordinated Indenture), the Property Trustee shall promptly pay
any taxes, duties, assessments or governmental charges of whatsoever nature
(other than withholding taxes) imposed on the Trust by the United States or any
other taxing authority.
Section 4.07. Payments under Indenture. Any amount payable to an
------------------------
Owner hereunder shall be reduced by the amount of any corresponding payment such
Owner has received pursuant to Section 508 of the Indenture.
ARTICLE V
Trust Securities Certificates
Section 5.01. Initial Ownership. Until the issuance of the Trust
-----------------
Securities, and at any time during which no Trust Securities are outstanding,
the Depositor shall be the sole beneficial owner of the Trust.
Section 5.02. The Trust Securities Certificates. Initial Holders
---------------------------------
shall purchase Preferred Securities in minimum denominations of $25 (based on
Liquidation Amount) and integral multiples of $25 in excess thereof, and the
Common Securities Certificates shall be issued in denominations of $25
Liquidation Amount and integral multiples thereof. The Trust Securities
Certificates shall be executed on behalf of the Trust by manual signature of at
least one Administrative Trustee. Trust Securities Certificates bearing the
manual signatures of individuals who were, at the time when such signatures
shall have been affixed, authorized to sign on behalf of the Trust, shall be
validly issued and entitled to the benefits of this Trust Agreement,
notwithstanding that such individuals or any of them shall have ceased to be so
authorized prior to the delivery of such Trust Securities Certificates or did
not hold such offices at the date of delivery of such Trust Securities
Certificates. A transferee of a Trust Securities Certificate shall become a
Securityholder, and shall be entitled to the rights and subject to the
obligations
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of a Securityholder hereunder, upon due registration of such Trust Securities
Certificate in such transferee's name pursuant to Section 5.04.
Section 5.03. Delivery of Trust Securities Certificates. On the
-----------------------------------------
Closing Date and on any date on which Preferred Securities are required to be
delivered pursuant to the exercise of the over-allotment option provided for in
the Underwriting Agreement, the Administrative Trustees shall cause Trust
Securities Certificates, in an aggregate Liquidation Amount as provided in
Sections 2.04 and 2.05, to be executed on behalf of the Trust and delivered to
or upon the written order of the Depositor signed by its Chairman, its Vice
Chairman, its Chief Executive Officer, its President or any Vice President,
without further corporate action by the Depositor, in authorized denominations.
Section 5.04. Registration of Transfer and Exchange of Preferred
--------------------------------------------------
Securities Certificates. A registrar appointed by the Administrative Trustees
- -----------------------
(the "Security Registrar") shall keep or cause to be kept, at the office or
agency maintained pursuant to Section 5.08, a register (the "Security Register")
in which, subject to such reasonable regulations as the Administrative Trustees
may prescribe, the Securities Registrar shall provide for the registration of
Preferred Securities Certificates and Common Securities Certificates (subject to
Section 5.10 in the case of the Common Securities Certificates) and registration
of transfers and exchanges of Preferred Securities Certificates as herein
provided. The Bank shall be the initial Securities Registrar.
Upon surrender for registration of transfer of any Preferred
Securities Certificate at the office or agency maintained pursuant to Section
5.08, the Administrative Trustees or any one of them shall execute and deliver,
in the name of the designated transferee or transferees, one or more new
Preferred Securities Certificates in authorized denominations of a like
aggregate Liquidation Amount dated the date of execution by such Administrative
Trustee or Trustees. The Securities Registrar shall not be required to register
the transfer of any Preferred Securities during a period beginning at the
opening of business 15 days before the day of the mailing of a notice of
redemption of any such Preferred Securities selected for redemption under
Section 4.02 hereof and ending at the closing of business on the day of such
mailing. At the option of a Holder, Preferred Securities Certificates may be
exchanged for other Preferred Securities Certificates in authorized
denominations of a like aggregate Liquidation Amount upon surrender of the
Preferred Securities Certificates to be exchanged at the office or agency
maintained pursuant to Section 5.08.
Every Preferred Securities Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by a written
instrument of transfer in form satisfactory to the Administrative Trustees and
the Securities Registrar duly executed by the Holder or his attorney duly
authorized in writing. Each Preferred
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Securities Certificate surrendered for registration of transfer or exchange
shall be canceled and subsequently disposed of by the Administrative Trustees.
No service charge shall be made for any registration of transfer or
exchange of Preferred Securities Certificates, but the Administrative Trustees
or the Securities Registrar may require payment of a sum sufficient to cover any
tax or governmental charge that may be imposed in connection with any transfer
of Preferred Securities Certificates.
Section 5.05. Mutilated, Destroyed, Lost or Stolen Trust Securities
-----------------------------------------------------
Certificates. If (a) any mutilated, destroyed, lost or stolen Trust Securities
- ------------
Certificate shall be surrendered to the Securities Registrar, or if the
Securities Registrar shall receive evidence to its satisfaction of the
destruction, loss or theft of any Trust Securities Certificate and (b) there
shall be delivered to the Securities Registrar and the Administrative Trustees
such security or indemnity as may be required by them to save each of them
harmless, then in the absence of notice that such Trust Securities Certificate
shall have been acquired by a bona fide purchaser, the Administrative Trustees
or any one of them on behalf of the Trust shall execute and make available for
delivery, in exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Trust Securities Certificate, a new Trust Securities Certificate of like
class, tenor and denomination. In connection with the issuance of any new Trust
Securities Certificate under this Section, the Administrative Trustees or the
Securities Registrar may require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection therewith.
Any duplicate Trust Securities Certificate issued pursuant to this Section 5.05
shall constitute conclusive evidence of an undivided beneficial interest in the
assets of the Trust, as if originally issued, whether or not the mutilated,
lost, stolen or destroyed Trust Securities Certificate shall be found at any
time.
The provisions of this Section 5.05 are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Trust Securities.
Section 5.06. Persons Deemed Securityholders. Prior to due
------------------------------
presentation of a Trust Securities Certificate for registration of transfer, the
Trustees or the Securities Registrar shall treat the Person in whose name any
Trust Securities Certificate shall be registered in the Securities Register as
the owner of such Trust Securities Certificate for the purpose of receiving
distributions and for all other purposes whatsoever, and neither the Trustees
nor the Securities Registrar shall be bound by any notice to the contrary.
Section 5.07. Access to List of Securityholders' Names and Addresses.
------------------------------------------------------
The Securities Registrar shall furnish or cause to be furnished (x) to the
Depositor, within 15 days after receipt by the Securities Registrar of a request
therefor from the Depositor
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in writing and (y) to the Property Trustee, semiannually, and at such other
times as the Property Trustee may request in writing promptly after receipt by
the Securities Registrar of any such request, a list, in such form as the
Depositor or the Property Trustee (as applicable) may reasonably require, of the
names and addresses of the Securityholders as of the most recent Record Date. If
three or more Holders of Trust Securities Certificates apply in writing to the
Securities Registrar, and such application states that the applicants desire to
communicate with other Securityholders with respect to their rights under this
Trust Agreement or under the Trust Securities Certificates and such application
is accompanied by a copy of the communication that such applicants propose to
transmit, then the Securities Registrar shall, within five Business Days after
the receipt of such application, afford such applicants access during normal
business hours to the current list of Securityholders. Each Holder, by receiving
and holding a Trust Securities Certificate, shall be deemed to have agreed not
to hold either the Depositor or the Securities Registrar accountable by reason
of the disclosure of its name and address, regardless of the source from which
such information was derived.
Section 5.08. Maintenance of Office or Agency. The Administrative
-------------------------------
Trustees shall maintain in the Borough of Manhattan, The City of New York, an
office or offices or agency or agencies where Preferred Securities Certificates
may be surrendered for registration of transfer or exchange and where notices
and demands to or upon the Trustees in respect of the Trust Securities
Certificates may be served. The Administrative Trustees initially designate the
Bank, 14 Wall Street, 8th Floor, New York, New York 10005 for such purposes.
The Administrative Trustees shall give prompt written notice to the Depositor
and to the Securityholders of any change in the location of the Securities
Register or any such office or agency.
Section 5.09. Appointment of Paying Agent. A paying agent (the
---------------------------
"Paying Agent") appointed hereby shall make distributions to Securityholders
from the Payment Account and shall report the amounts of such distributions to
the Property Trustee and the Administrative Trustees. Any Paying Agent shall
have the revocable power to withdraw funds from the Payment Account for the
purpose of making the distributions referred to above. The Administrative
Trustees may revoke such power and remove the Paying Agent if such Trustees
determine in their sole discretion that the Paying Agent shall have failed to
perform its obligations under this Agreement in any material respect. The
Paying Agent shall initially be the Bank, and the Paying Agent may choose any
co-paying agent that is acceptable to the Administrative Trustees, the Property
Trustee and the Depositor. Any Person acting as a Paying Agent shall be
permitted to resign as Paying Agent upon 30 days' written notice to the
Administrative Trustees, the Property Trustee and the Depositor. In the event
that the Bank shall no longer be the Paying Agent or a successor Paying Agent
shall resign or its authority to act be revoked, the Administrative Trustees
shall appoint a successor that is acceptable to the Property Trustee and the
Depositor to act as Paying Agent (which shall be a bank or trust company). The
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Administrative Trustees shall cause such successor Paying Agent or any co-paying
agent appointed by the Paying Agent to execute and deliver to the Trustees an
instrument in which such successor Paying Agent or additional Paying Agent shall
agree with the Trustees that as Paying Agent, such successor Paying Agent or
additional Paying Agent will hold all sums, if any, held by it for payment to
the Securityholders in trust for the benefit of the Securityholders entitled
thereto until such sums shall be paid to such Securityholders. The Paying Agent
shall return all unclaimed funds to the Property Trustee and upon removal of a
Paying Agent such Paying Agent shall also return all funds in its possession to
the Property Trustee. The provisions of Sections 8.01, 8.03 and 8.06 shall
apply to the Bank also in its role as Paying Agent, for so long as the Bank
shall act as Paying Agent and, to the extent applicable, to any other paying
agent appointed hereunder. Any reference in this Agreement to the Paying Agent
shall include any co-paying agent unless the context requires otherwise.
Section 5.10. Ownership of Common Securities by Depositor. On the
-------------------------------------------
Closing Date and on each other date provided for in Section 2.05, the Depositor
shall acquire, and thereafter retain, beneficial and record ownership of the
Common Securities. Any attempted transfer of the Common Securities shall be
void; provided, however, that any permitted successor of the Depositor pursuant
-------- -------
to Article VIII of the Subordinated Indenture may succeed to the Depositor's
ownership of the Common Securities. The Administrative Trustees shall cause
each Common Securities Certificate issued to the Depositor to contain a legend
stating "THIS CERTIFICATE IS NOT TRANSFERABLE".
Section 5.11. Book-Entry Interests; Common Securities Certificate.
---------------------------------------------------
(a) The Preferred Securities Certificates, upon original issuance,
will be issued in the form of a fully-registered typewritten global Preferred
Securities Certificate or Certificates (each, a "Global Certificate"), to be
delivered to The Depository Trust Company, the initial Clearing Agency, by, or
on behalf of, the Trust. Such Global Certificate or Certificates shall
initially be registered on the Securities Register in the name of Cede & Co.,
the nominee of the initial Clearing Agency, and no Owner will receive a
definitive Preferred Securities Certificate representing such Owner's beneficial
interest in such Global Certificate or Certificates, except as provided in
Section 5.13. Unless and until Definitive Preferred Securities Certificates
have been issued to Owners pursuant to Section 5.13:
(i) the provisions of this Section 5.11(a) shall be in full force
and effect;
(ii) the Securities Registrar, the Paying Agent and the Trustees
shall be entitled to deal with the Clearing Agency for all purposes of this
Trust Agreement (including the payment of Distributions on the Global
Certificate or Certificates
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<PAGE>
and the receiving of approvals, votes or consents hereunder) as the sole
Holder of the Preferred Securities and shall have no obligations to the
Owners of Book-Entry Interests;
(iii) to the extent that the provisions of this Section 5.11
conflict with any other provisions of this Trust Agreement, the provisions
of this Section 5.11 shall control; and
(iv) the rights of the Owners of the Book-Entry Interests shall be
exercised only through the Clearing Agency and shall be limited to those
established by law and agreements between such Owners and the Clearing
Agency and/or the Clearing Agency Participants.
(b) A single Common Securities Certificate representing the Common
Securities shall be issued to the Depositor in the form of a definitive Common
Securities Certificate.
Section 5.12. Notices to Clearing Agency. To the extent a notice or
--------------------------
other communication to the Owners is required under this Trust Agreement, unless
and until Definitive Preferred Securities Certificates shall have been issued to
Owners pursuant to Section 5.13, the Trustees shall give all such notices and
communications specified herein to be given to Owners to the Clearing Agency,
and shall have no obligations to the Owners.
Section 5.13. Definitive Preferred Securities Certificates. If (i)
--------------------------------------------
the Clearing Agency is no longer registered as a clearing agency under the
Exchange Act or the Depositor advises the Trustees in writing that the Clearing
Agency is no longer willing or able to properly discharge its responsibilities
with respect to the Preferred Securities Certificates, (ii) the Depositor at its
option advises the Trustees in writing that it elects to terminate the book-
entry system through the Clearing Agency or (iii) there is an Event of Default,
then the Clearing Agency shall notify all Owners of Book-Entry Interests and the
Trustees of the occurrence of any such event and of the availability of the
Definitive Preferred Securities Certificates to Owners of such class or classes,
as applicable, requesting the same. Upon surrender to the Administrative
Trustees of the Global Certificate or Certificates by the Clearing Agency,
accompanied by registration instructions, the Administrative Trustees, or any
one of them, shall cause the Definitive Preferred Securities Certificates to be
delivered to the Owners in accordance with the instructions of the Clearing
Agency. Neither the Securities Registrar nor the Trustees shall be liable for
any delay in delivery of such instructions and may conclusively rely on, and
shall be protected in relying on, such instructions. Upon the issuance of
Definitive Preferred Securities Certificates, the Trustees shall recognize the
Holders of the Definitive Preferred Securities Certificates as Securityholders.
The Definitive Preferred
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Securities Certificates shall be printed, lithographed or engraved or may be
produced in any other manner as is reasonably acceptable to the Administrative
Trustees, as evidenced by the execution thereof by the Administrative Trustees
or any one of them.
Section 5.14. Rights of Securityholders. The legal title to the
-------------------------
Trust Property is vested exclusively in the Property Trustee (in its capacity as
such) in accordance with Section 2.09, and the Securityholders shall not have
any right or title therein other than the undivided beneficial interest in the
assets of the Trust conferred by their Trust Securities and they shall have no
right to call for any partition or division of property, profits or rights of
the Trust. The Trust Securities shall be personal property giving only the
rights specifically set forth therein and in this Trust Agreement, but are not
interests in specific trust property. The Trust Securities shall have no
preemptive rights and when issued and delivered to Securityholders against
payment of the purchase price therefor will be fully paid and nonassessable by
the Trust. The Holders of the Preferred Securities, in their capacities as
such, shall be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware.
ARTICLE VI
Acts of Securityholders; Meetings; Voting
Section 6.01. Limitations on Voting Rights.
----------------------------
(a) Except as provided in this Section, in Sections 8.10 and 10.02
hereof, and in the Subordinated Indenture, and as otherwise required by law, no
Holder of Preferred Securities shall have any right to vote or in any manner
otherwise control the administration, operation and management of the Trust or
the obligations of the parties hereto, nor shall anything herein set forth, or
contained in the terms of the Trust Securities Certificates, be construed so as
to constitute the Securityholders from time to time as partners or members of an
association.
(b) So long as any Debentures are held by the Property Trustee on
behalf of the Trust, the Property Trustee shall not (i) direct the time, method
and place of conducting any proceeding for any remedy available to the Debenture
Trustee, or executing any trust or power conferred on the Debenture Trustee with
respect to such Debentures, (ii) waive any past default which is waivable under
Section 513 of the Subordinated Indenture, (iii) exercise any right to rescind
or annul a declaration that the principal of all the Debentures shall be due and
payable or (iv) consent to any amendment, modification or termination of the
Subordinated Indenture or the Debentures, where such consent shall be required,
without, in each case, obtaining the prior approval of the Holders of at least a
majority in aggregate Liquidation Amount of the Outstanding
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Preferred Securities; provided, however, that where a consent under the
-------- -------
Subordinated Indenture would require the consent of each holder of Debentures
affected thereby, no such consent shall be given by the Property Trustee without
the prior written consent of each Holder of Outstanding Preferred Securities.
The Property Trustee shall not revoke any action previously authorized or
approved by a vote of the Preferred Securities, except pursuant to a subsequent
vote of the Holders of the Preferred Securities. The Property Trustee shall
notify all Holders of the Preferred Securities of any notice of default received
from the Debenture Trustee with respect to the Debentures. In addition to
obtaining the foregoing approvals of the Holders of the Preferred Securities,
prior to taking any of the foregoing actions, the Property Trustee shall, at the
expense of the Depositor, obtain an Opinion of Counsel experienced in such
matters to the effect that the Trust will not be classified as an association
taxable as a corporation for United States federal income tax purposes on
account of such action.
(c) Subject to Section 10.02(c) hereof, if any proposed amendment to
the Trust Agreement provides for, or the Trustees otherwise propose to effect,
(i) any action that would adversely affect the powers, preferences or special
rights of the Preferred Securities, whether by way of amendment to the Trust
Agreement or otherwise, or (ii) the dissolution, winding-up or termination of
the Trust, other than pursuant to the terms of this Trust Agreement, then the
Holders of Outstanding Preferred Securities as a class will be entitled to vote
on such amendment or proposal and such amendment or proposal shall not be
effective except with the approval of the Holders of at least a majority in
Liquidation Amount of the Outstanding Preferred Securities. No amendment to
this Trust Agreement may be made if, as a result of such amendment, the Trust
would be classified as an association taxable as a corporation for United States
federal income tax purposes.
Section 6.02. Notice of Meetings. Notice of all meetings of the
------------------
Holders of the Preferred Securities, stating the time, place and purpose of the
meeting, shall be given by the Administrative Trustees in the manner provided by
Section 10.07 to each Holder of Preferred Securities of record, at his
registered address, at least 30 days and not more than 90 days before the
meeting. At any such meeting, any business properly before the meeting may be
so considered whether or not stated in the notice of the meeting. Any adjourned
meeting may be held as adjourned without further notice.
Any and all notices to which any Holders of Preferred Securities
hereunder may be entitled and any and all communications shall be deemed duly
served or given if mailed, postage prepaid, addressed to any Holder of Preferred
Securities of record at his last known address as recorded on the Securities
Register.
Section 6.03. Meetings of Preferred Securityholders. No annual
-------------------------------------
meeting of Securityholders is required to be held. The Administrative Trustees,
however, shall call a meeting of Securityholders to vote on any matter upon the
written request of the Holders
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of Preferred Securities of record of 25% of the Outstanding Preferred Securities
(based upon their aggregate Liquidation Amount) and the Administrative Trustees
or the Property Trustee may, at any time in their discretion, call a meeting of
Holders of Preferred Securities to vote on any matters as to the which Holders
of Preferred Securities are entitled to vote.
Securityholders of record of 50% of the Outstanding Preferred
Securities (based upon their aggregate Liquidation Amount), present in person or
by proxy, shall constitute a quorum at any meeting of Holders of Preferred
Securities.
If a quorum is present at a meeting, an affirmative vote by the
Securityholders of record present, in person or by proxy, holding more than a
majority of the Preferred Securities (based upon their Liquidation Amount) held
by the Securityholders of record present, either in person or by proxy, at such
meeting shall constitute the action of the Holders of Preferred Securities,
unless this Trust Agreement requires a greater number of affirmative votes.
Section 6.04. Voting Rights. Securityholders shall be entitled to
-------------
one vote for each $25 of Liquidation Amount represented by their Trust
Securities in respect of any matter as to which such Securityholders are
entitled to vote.
Section 6.05. Proxies, Etc. At any meeting of Securityholders, any
-------------
Securityholder entitled to vote thereat may vote by proxy, provided that no
proxy shall be voted at any meeting unless it shall have been placed on file
with the Administrative Trustees, or with such other officer or agent of the
Trust as the Administrative Trustees may direct, for verification prior to the
time at which such vote shall be taken. Pursuant to a resolution of the
Property Trustee, proxies may be solicited in the name of the Property Trustee
or one or more officers of the Property Trustee. Only Securityholders of record
shall be entitled to vote. When Trust Securities are held jointly by several
Persons, any one of them may vote at any meeting in Person or by proxy in
respect of such Trust Securities, but if more than one of them shall be present
at such meeting in Person or by proxy, and such joint owners or their proxies so
present disagree as to any vote to be cast, such vote shall not be received in
respect of such Trust Securities. A proxy purporting to be executed by or on
behalf of a Securityholder shall be deemed valid unless challenged at or prior
to its exercise, and the burden of proving invalidity shall rest on the
challenger.
Section 6.06. Securityholder Action by Written Consent. Any action
----------------------------------------
which may be taken by Securityholders at a meeting may be taken without a
meeting if Securityholders holding more than a majority of all Outstanding Trust
Securities (based upon their Liquidation Amount) entitled to vote in respect of
such action (or such larger proportion thereof as shall be required by any
express provision of this Trust Agreement) shall consent to the action in
writing.
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Section 6.07. Record Date for Voting and Other Purposes. The
-----------------------------------------
Administrative Trustees may, in the circumstances permitted by the Trust
Indenture Act, fix any day as the record date for the purpose of determining the
Holders entitled to give or take any request, demand, authorization, direction,
notice, consent, waiver or other action, or to vote on any action, authorized or
permitted to be given or taken by Holders. If not set by the Administrative
Trustees prior to the first solicitation of a Holder made by any such vote,
prior to such vote, the record date for any such action or vote shall be the
30th day (or, if later, the date of the most recent list of Holders required to
be provided pursuant to Section 5.07 hereof) prior to such first solicitation or
vote, as the case may be; provided, however, that in no event shall any such
-------- -------
record date be prior to the date on which the notice of such vote or other
action is given. With regard to any record date, only the Holders on such date
(or their duly designated proxies) shall be entitled to give or take, or vote
on, the relevant action.
Section 6.08. Acts of Securityholders. Any request, demand,
-----------------------
authorization, direction, notice, consent, waiver or other action provided or
permitted by this Trust Agreement to be given, made or taken by Securityholders
may be embodied in and evidenced by one or more instruments of substantially
similar tenor signed by such Securityholders in person or by an agent duly
appointed in writing; and, except as otherwise expressly provided herein, such
action shall become effective when such instrument or instruments are delivered
to an Administrative Trustee. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as the
"Act" of the Securityholders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent shall
be sufficient for any purpose of this Trust Agreement and (subject to Section
8.01) conclusive in favor of the Trustees, if made in the manner provided in
this Section 6.08.
The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where
such execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which any Trustee receiving the same deems sufficient.
In determining whether the Holders of the requisite Liquidation Amount
of outstanding Trust Securities has acted in connection with any request,
demand, authorization, direction, notice, consent, waiver or other action
provided or permitted by this Trust Agreement, then for purposes of such
determination, if the Trust Securities are
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registered in the form of one or more Global Securities, the Holders entitled to
act thereon shall mean the Owners of such Trust Securities.
Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Securityholder of any Trust Security shall bind every future
Securityholder of the same Trust Security and the Securityholder of every Trust
Security issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof in respect of anything done, omitted or suffered to
be done by the Trustees or the Trust in reliance thereon, whether or not
notation of such action is made upon such Trust Security.
Without limiting the foregoing, a Securityholder entitled hereunder to
take any action hereunder with regard to any particular Trust Security may do so
with regard to all or any part of the Liquidation Amount of such Trust Security
or by one or more duly appointed agents each of which may do so pursuant to such
appointment with regard to all or any part of such Liquidation Amount.
If any dispute shall arise between the Securityholders and the
Administrative Trustees or among such Securityholders or Trustees with respect
to the authenticity, validity or binding nature of any request, demand,
authorization, direction, notice, consent, waiver or other Act of such
Securityholder or Trustee under this Article VI, then the determination of such
matter by the Property Trustee shall be conclusive with respect to such matter.
This Section 6.08 shall not be deemed to supercede, or to impose
obligations in addition to, Section 6.05.
Section 6.09. Inspection of Records. Subject to Section 5.07
---------------------
concerning access to the list of Securityholders, upon reasonable notice to the
Administrative Trustees and the Property Trustee, the other records of the Trust
shall be open to inspection by Securityholders during normal business hours for
any purpose reasonably related to such Securityholder's interest as a
Securityholder.
ARTICLE VII
Representations and Warranties of the Bank, the Property Trustee,
the Administrative Trustees and the Delaware Trustee
The Bank, the Property Trustee, the Administrative Trustees and the
Delaware Trustee, each severally on behalf of and as to itself or himself, as
the case may be, hereby represents and warrants for the benefit of the Depositor
and the Securityholders that:
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(a) the Bank is a national banking association duly organized and
validly existing and is in good standing under the laws of the United
States;
(b) the Bank has full corporate power, authority and legal right to
execute, deliver and perform its obligations under this Trust Agreement and
has taken all necessary action to authorize the execution, delivery and
performance by it of this Trust Agreement;
(c) this Trust Agreement has been duly authorized, executed and
delivered by the Bank and constitutes the valid and legally binding
agreement of the Bank, enforceable against the Bank in accordance with its
terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity
principles;
(d) this Trust Agreement has been duly executed and delivered by each
of the Delaware Trustee and the Administrative Trustees and constitutes the
valid and legally binding agreement of the Delaware Trustee and the
Administrative Trustees, enforceable against the Delaware Trustee and the
Administrative Trustees in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors'
rights and to general equity principles;
(e) the execution, delivery and performance by the Bank of this Trust
Agreement have been duly authorized by all necessary corporate action on
the part of the Bank and the Property Trustee and do not require any
approval of stockholders of the Bank and such execution, delivery and
performance will not (i) violate the Bank's charter or by-laws, (ii)
violate any provision of, or constitute, with or without notice or lapse of
time, a default under, or result in the creation or imposition of, any Lien
on any properties included in the Trust Property pursuant to the provisions
of, any indenture, mortgage, credit agreement, license or other agreement
or instrument to which the Property Trustee or the Bank is a party or by
which it is bound, or (iii) violate any law, governmental rule or
regulation of the United States, governing the banking or trust powers of
the Bank and the Property Trustee (as appropriate in context) or any order,
judgment or decree applicable to the Bank or the Property Trustee;
(f) the execution, delivery and performance by the Delaware Trustee
and the Administrative Trustees of this Trust Agreement will not (i)
violate any provision of, or constitute, with or without notice or lapse of
time, a default under, or result in the creation or imposition of, any Lien
on any properties included in
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the Trust Property pursuant to the provisions of any indenture, mortgage or
credit agreement, license or other agreement or instrument to which the
Delaware Trustee or any of the Administrative Trustees is a party or by
which the Delaware Trustee or any of the Administrative Trustees is bound
or (ii) violate any law, governmental rule or regulation of the United
States or the State of Delaware, as the case may be, governing the Delaware
Trustee or any of the Administrative Trustees, or any order, judgment or
decree applicable to the Delaware Trustee or the Administrative Trustees;
(g) neither the authorization, execution or delivery by the Bank, the
Delaware Trustee or the Administrative Trustees of this Trust Agreement nor
the consummation of any of the transactions by the Bank, the Property
Trustee, the Delaware Trustee or the Administrative Trustees (as
appropriate in each context) contemplated herein or therein pursuant to
this Trust Agreement require the consent or approval of, the giving of
notice to, the registration with or the taking of any other action with
respect to any governmental authority or agency under any existing federal
law governing the banking or trust powers of the Bank, the Delaware Trustee
or any of the Administrative Trustees or under the laws of the State of
Delaware; and
(h) there are no proceedings pending or, to the best of each of the
Bank's, the Property Trustee's, the Administrative Trustees' and the
Delaware Trustee's knowledge, threatened against or affecting the Bank, the
Property Trustee, the Administrative Trustees or the Delaware Trustee in
any court or before any governmental authority, agency or arbitration board
or tribunal which, individually or in the aggregate, would materially and
adversely affect the Trust or would question the right, power and authority
of the Bank, the Property Trustee, any of the Administrative Trustees or
the Delaware Trustee to enter into or perform its obligations as one of the
Trustees under this Trust Agreement.
The Administrative Trustees each severally hereby represents and
warrants for the benefit of the Depositor and the Securityholders that:
(a) the Trust Securities Certificates issued on the Closing Date on
behalf of the Trust have been, and any Trust Securities Certificates to be
issued at the time of exercise, if any, of the over-allotment option under
the Underwriting Agreement will be duly authorized, and will have been, as
of each such date, duly and validly executed, issued and delivered by the
Administrative Trustees pursuant to the terms and provisions of, and in
accordance with the requirements of, this Trust Agreement and the
Securityholders will be, as of each such date, entitled to the benefits of
this Trust Agreement; and
(b) there are no taxes, fees or other governmental charges payable by
the Trust (or the Trustees on behalf of the Trust) under the laws of the
State of Delaware or any political subdivision thereof in connection with
the execution, delivery and performance by the Administrative Trustees, as
the case may be, of this Trust Agreement.
ARTICLE VIII
The Trustees
Section 8.01. Certain Duties and Responsibilities.
-----------------------------------
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(a) The duties and responsibilities of the Trustees shall be as
provided by this Trust Agreement and, in the case of the Property Trustee, by
the Trust Indenture Act. Notwithstanding the foregoing, no provision of this
Trust Agreement shall require the Trustees to expend or risk their own funds or
otherwise incur any financial liability in the performance of any of their
duties hereunder, or in the exercise of any of their rights or powers, if they
shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
them. Whether or not therein expressly so provided, every provision of this
Trust Agreement relating to the conduct or affecting the liability of or
affording protection to the Trustees shall be subject to the provisions of this
Section.
(b) All payments made by the Property Trustee or a Paying Agent in
respect of the Trust Securities shall be made only from the income and proceeds
from the Trust Property. Each Securityholder, by its acceptance of a Trust
Security, agrees that it will look solely to the income and proceeds from the
Trust Property to the extent legally available for distribution to it as herein
provided and that the Trustees are not personally liable to it for any amount
distributable in respect of any Trust Security or for any other liability in
respect of any Trust Security. This Section 8.01(b) does not limit the
liability of the Trustees expressly set forth elsewhere in this Trust Agreement,
including without limitation as set forth under Article VII, or, in the case of
the Property Trustee, in the Trust Indenture Act, or limit the rights of Owners
pursuant to Section 508 of the Indenture.
Section 8.02. Notice of Defaults. Within five Business Days after
------------------
the occurrence of any Event of Default actually known to the Property Trustee,
the Property Trustee shall transmit, in the manner provided in Section 10.08,
notice of such Event of Default to the Securityholders, the Administrative
Trustees and the Depositor, unless such default shall have been cured or waived.
For the purpose of this Section, the term "default" means any event which is, or
after notice or lapse of time or both would become, an Event of Default.
Section 8.03. Certain Rights of Property Trustee. Subject to the
----------------------------------
provisions of Section 8.01 and except as provided by law:
(i) the Property Trustee may conclusively rely upon and shall be
protected in acting or refraining from acting in good faith upon any
resolution, Opinion of Counsel, certificate, written representation of a
Holder or transferee, certificate of auditors or any other certificate,
statement, instrument, opinion, report, notice, request, consent, order,
appraisal, bond or other paper or document believed by it to be genuine and
to have been signed or presented by the proper party or parties;
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(ii) if (A) in performing its duties under this Trust Agreement the
Property Trustee is required to decide between alternative courses of
action or (B) in construing any of the provisions in this Trust Agreement
the Property Trustee finds the same ambiguous or inconsistent with any
other provisions contained herein or (C) the Property Trustee is unsure of
the application of any provision of this Trust Agreement, then, except as
to any matter as to which the Preferred Securityholders are entitled to
vote under the terms of this Trust Agreement, the Property Trustee shall
deliver a notice to the Depositor requesting written instructions of the
Depositor as to the course of action to be taken. The Property Trustee
shall take such action, or refrain from taking such action, as the Property
Trustee shall be instructed in writing to take, or to refrain from taking,
by the Depositor and shall have no liability whatsoever for such action or
inaction; provided, however, that if the Property Trustee does not receive
-------- -------
such instructions of the Depositor within ten Business Days after it has
delivered such notice, or such reasonably shorter period of time set forth
in such notice (which to the extent practicable shall not be less than two
Business Days), it may, but shall be under no duty to, take or refrain from
taking such action not inconsistent with this Trust Agreement as it shall
deem advisable and in the best interests of the Securityholders, in which
event the Property Trustee shall have no liability except for its own bad
faith, negligence or willful misconduct;
(iii) the Property Trustee may consult with counsel of its
selection and the written advice of such counsel or any Opinion of Counsel
shall be full and complete authorization and protection in respect of any
action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon;
(iv) the Property Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Trust Agreement at the
request or direction of any of the Securityholders pursuant to this Trust
Agreement, unless such Securityholders shall have offered to the Property
Trustee reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred by it in compliance with such request
or direction;
(v) the Property Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
consent, order, approval, bond or other paper or document; and
(vi) the Property Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
its agents or attorneys, provided that the Property Trustee shall be
responsible for its
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own negligence or recklessness with respect to selection of any agent or
attorney appointed by it hereunder.
Section 8.04. Not Responsible for Recitals or Issuance of Securities.
------------------------------------------------------
Except as provided in Article VII, the recitals contained herein and in the
Trust Securities Certificates shall be taken as the statements of the Trust, and
the Trustees do not assume any responsibility for their correctness. The
Trustees (other than the Administrative Trustees) shall not be accountable for
the use or application by the Trust of the proceeds of the Trust Securities in
accordance with Section 2.05.
Section 8.05. May Hold Securities. Except as provided in the
-------------------
definition of the term "Outstanding" in Article I, any Trustee or any other
agent of any Trustee or the Trust, in its individual or any other capacity, may
become the owner or pledgee of Trust Securities and may otherwise deal with the
Trust with the same rights it would have if it were not a Trustee or such other
agent.
Section 8.06. Compensation; Fees; Indemnity. The Depositor agrees:
-----------------------------
(1) to pay to the Trustees from time to time such compensation as the
Depositor and the Trustees shall from time to time agree in writing for all
services rendered by the Trustees hereunder (which compensation shall not
be limited by any provision of law with regard to the compensation of a
trustee of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustees upon request for all reasonable expenses, disbursements and
advances incurred or made by the Trustees in accordance with any provision
of this Trust Agreement (including the reasonable compensation and the
expenses and disbursements of its agents and counsel), except any such
expense, disbursement or advance as may be attributable to its bad faith,
negligence or willful misconduct; and
(3) (a) to the fullest extent permitted by applicable law, indemnify
and hold harmless (i) each Trustee, its Affiliates, officers, directors,
shareholders, employees, representatives and agents and (ii) any employee
or agent of the Trust or its Affiliates (referred to herein as an
"Indemnified Person") from and against any loss, damage, liability, tax,
penalty, expense or claim of any kind or nature whatsover incurred by such
Indemnified Person by reason of the creation, operation or termination of
the Trust or any act or omission performed or omitted by such Indemnified
Person in good faith on behalf of the Trust and in a manner such
Indemnified Person reasonably believed to be within the scope of authority
conferred on such Indemnified Person by this Trust Agreement, except that
no Indemnified Person shall be entitled to be indemnified in respect of any
loss, damage or claim incurred by such Indemnified Person by reason of
negligence or willful misconduct with respect to such acts or omissions.
(b) to the fullest extent permitted by applicable law, to advance,
from time to time, prior to the final disposition of any claim, demand,
action, suit or proceeding for which indemnification is authorized pursuant
to subsection (a) above, any expenses (including reasonable legal fees)
incurred by an Indemnified Person in defending such claim, demand, action,
suit or proceeding upon receipt by the Depositor of an undertaking by or on
behalf of the Indemnified Person to repay such amount if it shall be
determined that the Indemnified Person is not entitled to be indemnified as
authorized in subsection (a) above. This indemnification shall survive the
termination of this Trust Agreement.
Section 8.07. Corporate Property Trustee Required; Eligibility of
---------------------------------------------------
Trustees.
- --------
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(a) There shall at all times be a Property Trustee hereunder with
respect to the Trust Securities which is eligible to act as a trustee under the
Trust Indenture Act Section 310(a)(1) and which has (a) a combined capital and
surplus of at least $50,000,000 and (b) an unsecured or deposit rating of at
least investment grade by each of Standard & Poor's Ratings Group and Moody's
Investors Service, Inc. If any such Person publishes reports of condition at
least annually, pursuant to law or to the requirements of its supervising or
examining authority, then for the purposes of this Section, the combined capital
and surplus of such Person shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at
any time the Property Trustee with respect to the Trust Securities shall cease
to be eligible in accordance with the provisions of this Section, it shall
resign immediately in the manner and with the effect hereinafter specified in
this Article.
(b) There shall at all times be one or more Administrative Trustees
hereunder with respect to the Trust Securities. Each Administrative Trustee
shall be either a natural person who is at least 21 years of age or a legal
entity that shall act through one or more persons authorized to bind such
entity.
(c) There shall at all times be a Delaware Trustee with respect to the
Trust Securities. The Delaware Trustee shall either be (i) a natural person who
is at least 21 years of age and a resident of the State of Delaware or (ii) a
legal entity with its principal place of business in the State of Delaware and
that otherwise meets the requirements of applicable Delaware law, including the
Delaware Business Trust Act.
Section 8.08. Conflicting Interests. The Property Trustee shall
---------------------
comply with the provisions of Section 310(b) of the Trust Indenture Act. The
Property Trustee shall not be deemed to have a conflicting interest by virtue of
the Guarantee or the Subordinated Indenture.
Section 8.09. Co-Trustees and Separate Trustee. Unless an Event of
--------------------------------
Default shall have occurred and be continuing, at any time or times, for the
purpose of meeting the legal requirements of the Trust Indenture Act or of any
jurisdiction in which any part of the Trust Property may at the time be located,
the Holder of the Common Securities and the Administrative Trustees, by agreed
action of the majority of such Trustees, shall have power to appoint, and upon
the written request of the Administrative Trustees, the Depositor shall for such
purpose join with the Administrative Trustees in the execution, delivery, and
performance of all instruments and agreements necessary or proper to appoint,
one or more Persons approved by the Property Trustee either to act as co-
trustee, jointly with the Property Trustee, of all or any part of such Trust
Property, or to act as separate trustee of any such property, in either case
with such powers as may be provided in the instrument of appointment, and to
vest in such Person or Persons in the capacity aforesaid, any property, title,
right or power deemed necessary or desirable,
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subject to the other provisions of this Section. If the Depositor does not join
in such appointment within 15 days after the receipt by it of a request so to
do, or in case a Debenture Event of Default has occurred and is continuing, the
Property Trustee alone shall have power to make such appointment. Any co-trustee
or separate trustee appointed pursuant to this Section shall satisfy the
requirements of Section 8.07.
Should any written instrument from the Depositor be required by any
co-trustee or separate trustee so appointed for more fully confirming to such
co-trustee or separate trustee such property, title, right, or power, any and
all such instruments shall, on request, be executed, acknowledged, and delivered
by the Depositor.
Every co-trustee or separate trustee shall, to the extent permitted by
law, but to such extent only, be appointed subject to the following terms,
namely:
(1) The Trust Securities shall be executed and delivered and all
rights, powers, duties, and obligations hereunder in respect of the custody
of securities, cash and other personal property held by, or required to be
deposited or pledged with, the Trustees specified hereunder, shall be
exercised, solely by such Trustees.
(2) The rights, powers, duties, and obligations hereby conferred or
imposed upon the Property Trustee in respect of any property covered by
such appointment shall be conferred or imposed upon and exercised or
performed by the Property Trustee or by the Property Trustee and such co-
trustee or separate trustee jointly, as shall be provided in the instrument
appointing such co-trustee or separate trustee, except to the extent that
under any law of any jurisdiction in which any particular act is to be
performed, the Property Trustee shall be incompetent or unqualified to
perform such act, in which event such rights, powers, duties, and
obligations shall be exercised and performed by such co-trustee or separate
trustee.
(3) The Property Trustee at any time, by an instrument in writing
executed by it, with the written concurrence of the Depositor, may accept
the resignation of or remove any co-trustee or separate trustee appointed
under this Section, and, in case an Event of Default under the Subordinated
Indenture has occurred and is continuing, the Property Trustee shall have
power to accept the resignation of, or remove, any such co-trustee or
separate trustee without the concurrence of the Depositor. Upon the
written request of the Property Trustee, the Depositor shall join with the
Property Trustee in the execution, delivery, and performance of all
instruments and agreements necessary or proper to effectuate such
resignation or removal. A successor to any co-trustee or separate trustee
so resigned or removed may be appointed in the manner provided in this
Section.
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(4) No co-trustee or separate trustee hereunder shall be personally
liable by reason of any act or omission of the Property Trustee, or any
other trustee hereunder.
(5) The Property Trustee shall not be liable by reason of any act of a
co-trustee or separate trustee.
(6) Any Act of Holders delivered to the Property Trustee shall be
deemed to have been delivered to each such co-trustee and separate trustee.
Upon receipt of such Act of Holders, the Property Trustee shall promptly
deliver a copy thereof to each such co-trustee and separate trustee.
Section 8.10. Resignation and Removal; Appointment of Successor. No
-------------------------------------------------
resignation or removal of any Trustee (the "Relevant Trustee") and no
appointment of a successor Relevant Trustee pursuant to this Article shall
become effective until the acceptance of appointment by the successor Relevant
Trustee in accordance with the applicable requirements of Section 8.11.
The Relevant Trustee may resign at any time with respect to the Trust
Securities by giving written notice thereof to the Securityholders. If the
instrument of acceptance by a successor Relevant Trustee required by Section
8.11 shall not have been delivered to the Relevant Trustee within 30 days after
the giving of such notice of resignation, the resigning Relevant Trustee may
petition any court of competent jurisdiction for the appointment of a successor
Relevant Trustee with respect to the Trust Securities.
Unless an Event of Default shall have occurred and be continuing, the
Relevant Trustee may be removed at any time by Act of the Holder of the Common
Securities. If an Event of Default shall have occurred and be continuing, the
Relevant Trustee may be removed at such time by Act of the Holders of a majority
in aggregate Liquidation Amount of the Outstanding Preferred Securities,
delivered to the Relevant Trustee (in its individual capacity and on behalf of
the Trust).
If the Relevant Trustee shall resign, be removed or become incapable
of continuing to act as Relevant Trustee at a time when no Event of Default
shall have occurred and be continuing, the Holder of the Common Securities, by
Act of the Holder of the Common Securities delivered to the retiring Relevant
Trustee, shall promptly appoint a successor Relevant Trustee or Trustees with
respect to the Trust Securities and the Trust, and the retiring Relevant Trustee
shall comply with the applicable requirements of Section 8.11. If the Relevant
Trustee shall resign, be removed or become incapable of continuing to act as the
Relevant Trustee at a time when an Event of Default shall have occurred and be
continuing, the Holders of the Preferred Securities, by Act of the
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Securityholders of a majority in Liquidation Amount of the Preferred Securities
then Outstanding delivered to the retiring Relevant Trustee, shall promptly
appoint a successor Relevant Trustee or Trustees with respect to the Trust
Securities and the Trust, and the Relevant Trustee shall comply with the
applicable requirements of Section 8.11. If no successor Relevant Trustee with
respect to the Trust Securities shall have been so appointed by the Holders of
the Common Securities or the Preferred Securities and accepted appointment in
the manner required by Section 8.11, any Securityholder who has been a
Securityholder of Trust Securities for at least six months may, on behalf of
himself and all others similarly situated, petition any court of competent
jurisdiction for the appointment of a successor Relevant Trustee with respect to
the Trust Securities.
The retiring Relevant Trustee shall give notice of each resignation
and each removal of the Relevant Trustee with respect to the Trust Securities
and the Trust and each appointment of a successor Relevant Trustee with respect
to the Trust Securities and the Trust to all Securityholders in the manner
provided in Section 10.07 and to the Depositor. Each notice shall include the
name of the successor Relevant Trustee with respect to the Trust Securities and
the Trust and the address of its Corporate Trust Office.
In the event any Administrative Trustee or a Delaware Trustee who is a
natural person dies or becomes incompetent or incapacitated, the vacancy created
by such death, incompetence or incapacity may be filled by (i) the unanimous act
of remaining Administrative Trustees if there are at least two of them or (ii)
otherwise by the Depositor (with the successor satisfying the eligibility
requirement for an Administrative Trustee or a Delaware Trustee, as the case may
be, set forth in Section 8.07 hereof). Additionally, notwithstanding the
foregoing or any other provision of this Trust Agreement, in the event the
Depositor believes that any Administrative Trustee or the Delaware Trustee, as
the case may be, has become incompetent or incapacitated, the Depositor, by
notice to the remaining Trustees, may terminate the status of such Person as an
Administrative Trustee or the Delaware Trustee, as the case may be, (in which
case the vacancy so created will be filled in accordance with the preceding
sentence).
Section 8.11. Acceptance of Appointment by Successor. In the case of
--------------------------------------
the appointment hereunder of a successor Relevant Trustee with respect to Trust
Securities and the Trust, the retiring Relevant Trustee and each successor
Relevant Trustee so appointed shall execute and deliver an amendment hereto,
together with such other instrument or instruments as may be necessary, wherein
each successor Relevant Trustee shall accept such appointment and which
amendment (1) shall contain such provisions as shall be necessary or desirable
to transfer and confirm to, and to vest in, each successor Relevant Trustee all
the rights, powers, trusts and duties of the retiring Relevant Trustee with
respect to the Trust Securities and the Trust and (2) shall add to or change any
of the provisions of this Trust Agreement as shall be necessary to provide for
or facilitate the administration of the trusts hereunder by more than one
Relevant Trustee, it being
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understood that nothing herein or in such amendment shall constitute such
Relevant Trustees co-trustees of the same trust and that each such Relevant
Trustee shall be trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such Relevant Trustee;
and upon the request of the Depositor, the Trust or any successor Relevant
Trustee, such retiring Relevant Trustee shall, upon payment of its charges, duly
assign, transfer and deliver to such successor Relevant Trustee all Trust
Property (including legal title thereto, in the case of a retiring Property
Trustee), all proceeds thereof and money held by such retiring Relevant Trustee
hereunder with respect to the Trust Securities and the Trust; and upon execution
and delivery of such amendment and instrument, the resignation or removal of the
retiring Relevant Trustee shall become effective to the extent provided therein
and each such successor Relevant Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Relevant Trustee with respect to the Trust Securities and the
Trust.
Upon request of any such successor Relevant Trustee, the
Administrative Trustees on behalf of the Trust shall execute any and all
instruments for more fully and certainly vesting in and confirming to such
successor Relevant Trustee all such rights, powers and trusts referred to in the
preceding paragraph.
No successor Relevant Trustee shall accept its appointment unless at
the time of such acceptance such successor Relevant Trustee shall be qualified
and eligible under this Article VIII.
Section 8.12. Merger, Conversion, Consolidation or Succession to
--------------------------------------------------
Business. Any Person into which the Property Trustee or, if not a natural
- --------
person, the Delaware Trustee or any Administrative Trustee may be merged or
converted or with which it may be consolidated, or any Person resulting from any
merger, conversion or consolidation to which such Relevant Trustee shall be a
party, or any Person succeeding to all or substantially all the corporate trust
business of such Relevant Trustee, shall be the successor of such Relevant
Trustee hereunder, provided such Person shall be otherwise qualified and
eligible under this Article, without the execution or filing of any paper or any
further act on the part of any of the parties hereto.
Section 8.13. Preferential Collection of Claims Against Depositor or
------------------------------------------------------
Trust. If and when the Property Trustee shall be or become a creditor of the
- -----
Depositor or the Trust (or any other obligor upon the Debentures or the Trust
Securities), the Property Trustee shall be subject to the provisions of the
Trust Indenture Act regarding the collection of claims against the Depositor or
the Trust (or any such other obligor).
Section 8.14. Reports by Property Trustee.
---------------------------
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(a) Within 60 days after December 31 of each year commencing with
December 31, 1995, the Property Trustee shall transmit by mail to all
Securityholders, as their names and addresses appear in the Securities Register,
(i) as provided in Trust Indenture Act Section 313(c), and to the Depositor, a
brief report dated as of such December 31 in accordance with and to the extent
required by Trust Indenture Act Section 313(a) and (ii) a statement that the
Property Trustee has complied with all of its obligations under this Trust
Agreement during the twelve-month period (or, in the case of the initial report,
the period since the Closing Date) ending with such December 31 or, if the
Property Trustee has not complied in any material respect with such obligations,
a description of such non-compliance.
(b) In addition, the Property Trustee shall transmit to
Securityholders such reports concerning the Property Trustee and its actions
under this Trust Agreement as may be required pursuant to the Trust Indenture
Act at the times and in the manner provided pursuant thereto.
(c) A copy of each such report shall, at the time of such transmission
to Holders, be filed by the Property Trustee with each stock exchange upon which
the Trust Securities are listed, with the Commission and with the Depositor.
Section 8.15. Reports to the Property Trustee. The Depositor and the
-------------------------------
Administrative Trustees on behalf of the Trust shall provide to the Property
Trustee such documents, reports and information as required by Section 314 of
the Trust Indenture Act (if any) and the compliance certificate required by
Section 314 of the Trust Indenture Act in the form, in the manner and at the
times required by Section 314 of the Trust Indenture Act.
Section 8.16. Evidence of Compliance with Conditions Precedent. Each
------------------------------------------------
of the Depositor and the Administrative Trustees on behalf of the Trust shall
provide to the Property Trustee evidence of compliance with any conditions
precedent, if any, provided for in this Trust Agreement that relate to any of
the matters set forth in Section 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to Section
314(c) of the Trust Indenture Act shall comply with Section 314(e) of the Trust
Indenture Act.
Section 8.17. Number of Trustees.
------------------
(a) The number of Trustees shall be five and shall consist of one
Delaware Trustee, one Property Trustee and three Administrative Trustees
(provided that the Depositor, by written instrument may increase or decrease the
number of Administrative Trustees).
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(b) If a Trustee ceases to hold office for any reason and the number
of Administrative Trustees is not reduced pursuant to Section 8.17(a), or if the
number of Trustees is increased pursuant to Section 8.17(a), a vacancy shall
occur. The vacancy shall be filled with a Trustee appointed in accordance with
Section 8.10.
(c) The death, resignation, retirement, removal, bankruptcy,
incompetence or incapacity to perform the duties of a Trustee shall not operate
to annul the Trust. Whenever a vacancy in the number of Administrative Trustees
shall occur, until such vacancy is filled by the appointment of an
Administrative Trustee in accordance with Section 8.10, the Administrative
Trustees in office, regardless of their number (and notwithstanding any other
provision of this Agreement), shall have all the powers granted to the
Administrative Trustees and shall discharge all the duties imposed upon the
Administrative Trustees by this Trust Agreement.
Section 8.18. Delegation of Power.
-------------------
(a) Any Administrative Trustee may, by power of attorney consistent
with applicable law, delegate to any other natural person over the age of 21 his
or her power for the purpose of executing any documents contemplated in Section
2.07(a), including any registration statement or amendment thereto filed with
the Commission, or making any other governmental filing; and
(b) the Administrative Trustees shall have power to delegate from time
to time to such of their number the doing of such things and the execution of
such instruments either in the name of the Trust or the names of the
Administrative Trustees or otherwise as the Administrative Trustees may deem
expedient, to the extent such delegation is not prohibited by applicable law or
contrary to the provisions of the Trust, as set forth herein.
Section 8.19 Outside Business.
-----------------
Any Trustee may engage in or possess an interest in other business
ventures of any nature or description, independently or with others, similar or
dissimilar to the business of the Trust, and the Trust and the Holders of
Securities shall have no rights by virtue of this Trust Agreement in and to such
independent ventures or the income or profits derived therefrom and the pursuit
of any such venture, even if competitive with the business of the Trust, shall
not be deemed wrongful or improper. No Trustee shall be obligated to present
any particular investment or other opportunity to the Trust even if such
opportunity is of a character that, if presented to the Trust, could be taken by
the Trust, and any Trustee shall have the right to take for its own account
(individually as a partner or fiduciary) or to recommend to others any such
particular investment or other opportunity. Any Trustee may engage or be
interested in
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<PAGE>
any financial or other transaction with the Depositor or any Affiliate of the
Depositor, or may act on any committee or body of holders of, securities or
other obligations of the Depositor or its Affiliates.
ARTICLE IX
Termination and Liquidation
Section 9.01. Termination Upon Expiration Date. The Trust shall
--------------------------------
automatically terminate on December 31, 2050 (the "Expiration Date") following
the distribution of the Trust Property in accordance with Section 9.04.
Section 9.02. Early Termination. Upon the first to occur of any of
-----------------
the following events (such first occurrence, an "Early Termination Event"):
(i) the occurrence of a Bankruptcy Event in respect of, or the
dissolution or liquidation of, the Depositor;
(ii) the occurrence of a Tax Event and a related required redemption
of the Preferred Securities for cash or the distribution of Debentures to
Securityholders in accordance with Section 4.02(b);
(iii) the redemption of all of the Preferred Securities; and
(iv) an order for dissolution of the Trust shall have been entered
by a court of competent jurisdiction;
then the Trustees shall take such action as is required by Section 4.02 or
Section 9.04, as applicable.
Section 9.03. Termination. The respective obligations and
-----------
responsibilities of the Trustees and the Trust created and continued hereby
shall terminate upon the latest to occur of the following: (i) the distribution
by the Property Trustee to Securityholders upon the liquidation of the Trust
pursuant to Section 9.04, or upon the redemption of all of the Trust Securities
pursuant to Section 4.02, of all amounts required to be distributed hereunder
upon the final payment of the Trust Securities; (ii) the payment of any expenses
owed by the Trust; and (iii) the discharge of all administrative duties of the
Administrative Trustees, including the performance of any tax reporting
obligations with respect to the Trust or the Securityholders.
Section 9.04. Liquidation.
-----------
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<PAGE>
(a) If an Early Termination Event specified in clause (i), (ii) (other
than a redemption of the Preferred Securities for cash) or (iv) of Section 9.02
occurs, the Trust shall be liquidated by the Trustees as expeditiously as the
Trustees determine to be appropriate by distributing to each Securityholder,
after satisfaction of liabilities to creditors, a Like Amount of Debentures,
subject to Section 9.04(d). Notice of liquidation shall be given by the
Administrative Trustees by first-class mail, postage prepaid, mailed not later
than 30 nor more than 60 days prior to the Liquidation Date to each Holder of
Trust Securities at such Holder's address appearing in the Securities Register.
All notices of liquidation shall:
(i) state the Liquidation Date;
(ii) state that from and after the Liquidation Date, the Trust
Securities will no longer be deemed to be outstanding and any Trust
Securities Certificates not surrendered for exchange will be deemed to
represent a Like Amount of Debentures; and
(iii) provide such information with respect to the mechanics by
which Holders may exchange Trust Securities Certificates for Debentures, or
if Section 9.04(d) applies receive a Liquidation Distribution, as the
Administrative Trustees or the Property Trustee shall deem appropriate.
(b) Except where Section 9.04(d) applies, in order to effect the
liquidation of the Trust and distribution of the Debentures to Securityholders,
the Property Trustee shall establish such procedures as it shall deem
appropriate to effect the distribution of Debentures in exchange for the
Outstanding Trust Securities Certificates.
(c) Except where Section 9.04(d) applies, after the Liquidation Date,
(i) the Trust Securities will no longer be deemed to be Outstanding, (ii)
certificates representing a Like Amount of Debentures will be issued to Holders
of Trust Securities Certificates, upon surrender of such certificates to the
Administrative Trustees or their agent for exchange, (iii) Rouse shall use its
reasonable efforts to have the Debentures listed on the New York Stock Exchange
or on such other exchange as the Preferred Securities are then listed and shall
take any reasonable action necessary to effect the distribution of Debentures,
(iv) any Trust Securities Certificates not so surrendered for exchange will be
deemed to represent a Like Amount of Debentures, accruing interest at the rate
provided for in the Debentures from the last Distribution Date on which a
Distribution was made on such Trust Certificates until such certificates are so
surrendered (and until such certificates are so surrendered, no payments or
interest or principal will be made to Holders of Trust Securities Certificates
with respect to such Debentures) and (v) all rights of Securityholders holding
Trust Securities will cease, except the right of such Securityholders to receive
Debentures upon surrender of Trust Securities Certificates.
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<PAGE>
(d) In the event that, notwithstanding the other provisions of this
Section 9.04, whether because of an order for dissolution entered by a court of
competent jurisdiction or otherwise, distribution of the Debentures in the
manner provided herein is determined by the Property Trustee not to be
practical, the Trust Property shall be liquidated, and the Trust shall be
dissolved, wound-up or terminated, by the Property Trustee in such manner as the
Property Trustee determines. In such event, on the date of the dissolution,
winding-up or other termination of the Trust, Securityholders will be entitled
to receive out of the assets of the Trust available for distribution to
Securityholders, after satisfaction of liabilities to creditors, an amount equal
to the Liquidation Amount per Trust Security plus accrued and unpaid
Distributions thereon to the date of payment whether or not earned or declared
(such amount being the "Liquidation Distribution"). If, upon any such
dissolution, winding-up or termination, the Liquidation Distribution can be paid
only in part because the Trust has insufficient assets available to pay in full
the aggregate Liquidation Distribution, then, subject to the next succeeding
sentence, the amounts payable by the Trust on the Trust Securities shall be paid
on a pro rata basis (based upon Liquidation Amounts). The Holder of the Common
--- ----
Securities will be entitled to receive Liquidation Distributions upon any such
dissolution, winding-up or termination pro rata (determined as aforesaid) with
Holders of Preferred Securities, except that, if an Event of Default has
occurred and is continuing, the Preferred Securities shall have a priority over
the Common Securities.
ARTICLE X
Miscellaneous Provisions
Section 10.01. Limitation of Rights of Securityholders. The death or
---------------------------------------
incapacity of any person having an interest, beneficial or otherwise, in a Trust
Security shall not operate to terminate this Trust Agreement, nor entitle the
legal representatives or heirs of such person or any Securityholder for such
person, to claim an accounting, take any action or bring any proceeding in any
court for a partition or winding up of the arrangements contemplated hereby, nor
otherwise affect the rights, obligations and liabilities of the parties hereto
or any of them.
Section 10.02. Amendment.
---------
(a) This Trust Agreement may be amended from time to time by the
Administrative Trustees and the Depositor, without the consent of any
Securityholders, (i) to cure any ambiguity, correct or supplement any provision
herein or therein which may be inconsistent with any other provision herein or
therein, or to make any other provisions with respect to matters or questions
arising under this Trust Agreement, which shall not be inconsistent with the
other provisions of this Trust Agreement or (ii) to modify, eliminate or add to
any provisions of this Trust Agreement to such extent as shall
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<PAGE>
be necessary to ensure that the Trust will not be classified for United States
federal income tax purposes as an association taxable as a corporation at any
time that any Trust Securities are outstanding or to ensure that the Trust will
not be required to register as an "investment company" under the Investment
Company Act of 1940, as amended; provided, however, that such amendment or
-------- -------
action shall not adversely affect the rights of any Securityholder and, in the
case of clause (i), any amendments of this Trust Agreement shall become
effective when notice thereof is given to the Securityholders.
(b) Except as provided in Section 10.02(c) hereof, any provision of
this Trust Agreement may be amended by the Administrative Trustees and the
Depositor with (i) the consent of Trust Securityholders representing not less
than a majority (based upon Liquidation Amounts) of the Trust Securities then
Outstanding and (ii) receipt by the Trustees of an Opinion of Counsel to the
effect that such amendment or the exercise of any power granted to the Trustees
in accordance with such amendment will not affect the Trust's status as a
grantor trust for federal income tax purposes or cause the Trust to fail or
cease to qualify for an exemption from the status of an "investment company"
under the Investment Company Act of 1940, as amended.
(c) In addition to and notwithstanding any other provision in this
Trust Agreement, without the consent of each affected Securityholder (such
consent being obtained in accordance with Section 6.03 or 6.06 hereof), this
Trust Agreement may not be amended to (i) change the amount, timing, place of
payment or currency of any Distribution or Liquidation Distribution on the Trust
Securities or otherwise adversely affect the amount of any Distribution or
Liquidation Distribution required to be made in respect of the Trust Securities
as of a specified date, (ii) restrict the right of a Securityholder to institute
suit for the enforcement of any such payment on or after such date, (iii) modify
the first sentence of Section 2.06 hereof, (iv) authorize or issue any interest
in the Trust other than as contemplated by this Agreement as of the date hereof,
(v) change the Redemption Price or modify the provisions of Section 4.02 hereof
or (vi) affect the limited liability of any holder of Preferred Securities;
notwithstanding any other provision herein, without the unanimous consent of the
Securityholders (such consent being obtained in accordance with Section 6.03 or
6.06 hereof), the proviso in the first sentence of Section 6.01(b) hereof and
paragraphs (b) and (d) of this Section 10.02 may not be amended.
(d) Notwithstanding any other provisions of this Trust Agreement, no
Trustee shall enter into or consent to any amendment to this Trust Agreement
which would cause the Trust to fail or cease to qualify for an exemption from
status of an "investment company" under the Investment Company Act of 1940, as
amended.
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<PAGE>
(e) Notwithstanding anything in this Trust Agreement to the contrary,
without the consent of the Depositor, this Trust Agreement may not be amended in
a manner which imposes any additional obligation on the Depositor.
(f) In the event that any amendment to this Trust Agreement is made,
the Administrative Trustees shall promptly provide to the Depositor a copy of
such amendment.
Section 10.03. Agreement to be Bound. Each Person, by virtue of
---------------------
having become a Securityholder or an Owner in accordance with the terms of this
Trust Agreement, shall be deemed to have expressly assented and agreed to the
terms of, and shall be bound by, this Trust Agreement, the Guarantee and the
Subordinated Indenture.
Section 10.04. Separability. In case any provision in this Trust
------------
Agreement or in the Trust Securities Certificates shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
SECTION 10.05. GOVERNING LAW. THIS TRUST AGREEMENT AND THE RIGHTS
-------------
AND OBLIGATIONS OF EACH OF THE SECURITYHOLDERS, THE TRUST AND THE TRUSTEES WITH
RESPECT TO THIS TRUST AGREEMENT AND THE TRUST SECURITIES SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF DELAWARE.
Section 10.06. Successors. This Trust Agreement shall be binding
----------
upon and shall inure to the benefit of any successor to the Trust or the
Relevant Trustee or both, including any successor by operation of law.
Section 10.07. Headings. The Article and Section headings are for
--------
convenience only and shall not affect the construction of this Trust Agreement.
Section 10.08. Notice and Demand. Any notice, demand or other
-----------------
communication which by any provision of this Trust Agreement is required or
permitted to be given or served to or upon any Securityholder or the Depositor
may be given or served in writing by deposit thereof, postage prepaid, in the
United States mail, hand delivery or facsimile transmission, in each case,
addressed, (i) in the case of a Holder of Preferred Securities, to such Holder
of Preferred Securityholder as such Securityholder's name and address may appear
on the Securities Register and (ii) in the case of the Holder of Common
Securities or the Depositor, to The Rouse Company, 10275 Little Patuxent
Parkway, Columbia, Maryland 21044-3456, Attention: Treasurer, facsimile no.
(410) 992-6363, with a copy to the Secretary, facsimile no. (410) 992-6363.
Such notice, demand or other communication to or upon a Securityholder shall be
deemed to have
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<PAGE>
been sufficiently given or made, for all purposes, upon hand delivery, mailing
or transmission.
Any notice, demand or other communication which by any provision of
this Trust Agreement is required or permitted to be given or served to or upon
the Trust, the Property Trustee , the Delaware Trustee or the Administrative
Trustees shall be given in writing addressed (until another address is published
by the Trust) as follows: (i) with respect to the Property Trustee and the
Delaware Trustee, The First National Bank of Chicago, One First National Plaza,
Mail Suite 0126, Chicago, Illinois 60670-0126, Attention: Corporate Trust
Services Division with a copy to: Michael J. Majchrzak, c/o FCC National Bank,
300 King Street, Wilmington, Delaware 19801, and (ii) with respect to the
Administrative Trustees, to them at the address above for notices to the
Depositor, marked "Attention: Administrative Trustees of Rouse Capital c/o
Treasury Department". Such notice, demand or other communication to or upon
the Trust or the Property Trustee shall be deemed to have been sufficiently
given or made only upon actual receipt of the writing by the Trust or the
Property Trustee.
Section 10.09. Agreement Not to Petition. Each of the Trustees and
-------------------------
the Depositor agree for the benefit of the Securityholders that, until at least
one year and one day after the Trust has been terminated in accordance with
Article IX, they shall not file, or join in the filing of, a petition against
the Trust under any bankruptcy, reorganization, arrangement, insolvency,
liquidation or other similar law (including, without limitation, the Federal
Bankruptcy Code) (collectively, "Bankruptcy Laws") or otherwise join in the
commencement of any proceeding against the Trust under any Bankruptcy Law. In
the event the Depositor takes action in violation of this Section 10.08, the
Property Trustee agrees, for the benefit of Securityholders, that at the expense
of the Depositor it shall file an answer with the bankruptcy court or otherwise
properly contest the filing of such petition by the Depositor against the Trust
or the commencement of such action and raise the defense that the Depositor has
agreed in writing not to take such action and should be stopped and precluded
therefrom and such other defenses, if any, as counsel for the Property Trustee
or the Trust may assert. The provisions of this Section 10.08 shall survive the
termination of this Trust Agreement.
Section 10.10. Trust Indenture Act; Conflict with Trust Indenture
--------------------------------------------------
Act.
(a) This Trust Agreement is subject to the provisions of the Trust
Indenture Act that are required to be part of this Trust Agreement and shall, to
the extent applicable, be governed by such provisions.
(b) The Property Trustee shall be the only Trustee which is a Trustee
for the purposes of the Trust Indenture Act.
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<PAGE>
(c) If any provision hereof limits, qualifies or conflicts with
another provision hereof which is required to be included in this Trust
Agreement by any of the provisions of the Trust Indenture Act, such required
provision shall control.
(d) The application of the Trust Indenture Act to this Trust Agreement
shall not affect the nature of the Trust Securities as equity securities
representing undivided beneficial interests in the assets of the Trust.
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<PAGE>
THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY INTEREST THEREIN BY OR ON
BEHALF OF A SECURITYHOLDER OR ANY OWNER, WITHOUT ANY SIGNATURE OR FURTHER
MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE UNCONDITIONAL ACCEPTANCE BY THE
SECURITYHOLDER AND ALL OTHERS HAVING A BENEFICIAL INTEREST IN SUCH TRUST
SECURITY OF ALL THE TERMS AND PROVISIONS OF THIS TRUST AGREEMENT AND THE
AGREEMENT OF THE TRUST, SUCH SECURITYHOLDER AND SUCH OTHERS THAT THOSE TERMS AND
PROVISIONS SHALL BE BINDING, OPERATIVE AND EFFECTIVE AS BETWEEN THE TRUST AND
SUCH SECURITYHOLDER AND SUCH OTHERS.
THE ROUSE COMPANY, as Depositor
By:__________________________________________
Name:
Title:
THE FIRST NATIONAL BANK OF CHICAGO,
as Property Trustee
By:__________________________________________
Name:
Title:
_____________________________________________
Michael J. Machrzak, as Delaware Trustee
---------------------------------------------
Jeffrey H. Donahue, as Administrative Trustee
---------------------------------------------
Patricia H. Dayton, as Administrative Trustee
---------------------------------------------
George L. Yungmann, as Administrative Trustee
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<PAGE>
EXHIBIT A
CERTIFICATE OF TRUST
OF
ROUSE CAPITAL
THIS CERTIFICATE OF TRUST of Rouse Capital (the "Trust"), dated
September 29, 1995, is being duly executed and filed by the undersigned, as
trustee, to form a business trust under the Delaware Business Trust Act (12 Del.
Code Section 3801 et seq.).
1. Name. The name of the business trust being formed hereby is Rouse
----
Capital.
2. Delaware Trustee. The name and business address of the trustee of
----------------
the Trust who is a resident of the State of Delaware is Michael J. Majchrzak,
c/o FCC National Bank, 300 King Street, Wilmington, DE 19801.
3. Effective Date. This Certificate of Trust shall be effective as
--------------
of its filing.
IN WITNESS WHEREOF, the undersigned, being the trustees of the Trust,
have executed this Certificate of Trust as of the date first above written.
----------------------------------------
Michael J. Majchrzak, as Delaware Trustee
THE FIRST NATIONAL BANK OF CHICAGO,
as Property Trustee
By:______________________________________
Name:
Title:
<PAGE>
EXHIBIT B
_______ __, 1995
The Depository Trust Company,
55 Water Street, 49th Floor,
New York, New York 10041-0099
Attention: General Counsel's Office
Re: Rouse Capital ____% Cumulative
Quarterly Income Preferred Securities,
Ladies and Gentlemen:
The purpose of this letter is to set forth certain matters relating to the
issuance and deposit with The Depository Trust Company ("DTC") of the Rouse
Capital ____% Cumulative Quarterly Income Preferred Securities (the "Preferred
Securities"), of Rouse Capital, a Delaware business trust (the "Issuer"), formed
pursuant to a Trust Agreement between The Rouse Company ("Rouse") and The First
National Bank of Chicago ("First Chicago") and Michael J. Majchrzak, as
Trustees. The payment of distributions on the Preferred Securities and payments
due upon liquidation of the Issuer or redemption of the Preferred Securities are
to be guaranteed by Rouse to the extent set forth in a Guarantee Agreement dated
_______ __, 1995 by Rouse and First Chicago, as guarantee trustee, with respect
to the Preferred Securities. Rouse and the Issuer propose to sell the Preferred
Securities to certain underwriters (the "Underwriters") pursuant to an
Underwriting Agreement dated _______ __, 1995 by and among the Underwriters, the
Issuer and Rouse, and the Underwriters wish to take delivery of the Preferred
Securities through DTC.
To induce DTC to accept the Preferred Securities as eligible for deposit
at DTC, and to act in accordance with DTC's Rules with respect to the Preferred
Securities, the Issuer and First Chicago make the following representations to
DTC:
1. Prior to the closing of the sale of the Preferred Securities to the
Underwriters, which is expected to occur on or about _______ __, 1995, there
shall be deposited with DTC one or more global certificates (individually and
collectively, the "Global Certificate") registered in the name of DTC's nominee,
Cede & Co., representing an aggregate of up to 4,600,000 Preferred Securities
and bearing the following legend:
<PAGE>
Unless this certificate is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC"), to
the Issuer or its agent for registration of transfer, exchange, or
payment, and any certificate issued is registered in the name of Cede
& Co. or in such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of
DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
2. The Amended and Restated Trust Agreement of Rouse Capital provides
for the voting by holders of the Preferred Securities under certain limited
circumstances. The Issuer shall establish a record date for such purposes and
shall, to the extent possible, give DTC notice of such record date not less than
15 calendar days in advance of such record date.
3. In the event of a stock split, conversion, recapitalization,
reorganization or any other similar transaction resulting in the cancellation of
all or any part of the Preferred Securities outstanding, the Issuer or First
Chicago shall send DTC a notice of such event at least five business days prior
to the effective date of such event.
4. In the event of distribution on, or an offering or issuance of rights
with respect to, the Preferred Securities outstanding, the Issuer or First
Chicago shall send DTC a notice specifying: (a) the amount of and conditions, if
any, applicable to the payment of any such distribution or any such offering or
issuance of rights; (b) any applicable expiration or deadline date, or any date
by which any action on the part of the holders of Preferred Securities is
required; and (c) the date any required notice is to be mailed by or on behalf
of the Issuer to holders of Preferred Securities or published by or on behalf of
the Issuer (whether by mail or publication, the "Publication Date"). Such notice
shall be sent to DTC by a secure means (e.g., legible telecopy, registered or
----
certified mail, overnight delivery) in a timely manner designed to assure
that such notice is in DTC's possession no later than the close of business on
the business day before the Publication Date. The Issuer or First Chicago will
forward such notice either in a separate secure transmission for each CUSIP
number or in a secure transmission of multiple CUSIP numbers (if applicable)
that includes a manifest or list of each CUSIP number submitted in that
transmission. (The party sending such notice shall have a method to verify
subsequently the use of such means and the timeliness of such notice.) The
Publication Date shall be not less than 30 calendar days nor more than 60
calendar days prior to the payment of any such distribution or any such offering
or issuance of rights with respect to the Preferred Securities. After
establishing the amount of payment to be made on the Preferred Securities, the
Issuer or First Chicago will notify DTC's
B-2
<PAGE>
Dividend Department of such payment 5 business days prior to payment date.
Notices to DTC's Dividend Department by telecopy shall be sent to (212) 709-
1723. Such notices by mail or by any other means shall be sent to:
Manager, Announcements
Dividend Department
The Depository Trust Company
7 Hanover Square, 23rd Floor
New York, New York 10004-2695
The Issuer or First Chicago shall confirm DTC's receipt of such telecopy by
telephoning the Dividend Department at (212) 709-1270.
5. In the event of a redemption by the Issuer of the Preferred
Securities, notice specifying the terms of the redemption and the Publication
Date of such notice shall be sent by the Issuer or First Chicago to DTC not less
than 30 calendar days prior to such event by a secure means in the manner set
forth in paragraph 4. Such redemption notice shall be sent to DTC's Call
Notification Department at (516) 227-4164 or (516) 227-4190, and receipt of such
notice shall be confirmed by telephoning (516) 227-4070. Notice by mail or by
any other means shall be sent to:
Call Notification Department
The Depository Trust Company
Garden City, New York 11530-4719
6. In the event of any invitation to tender the Preferred Securities,
notice specifying the terms of the tender and the Publication Date of such
notice shall be sent by the Issuer or First Chicago to DTC by a secure means and
in a timely manner as described in paragraph 4. Notices to DTC pursuant to this
paragraph and notices of other corporate actions (including mandatory tenders,
exchanges and capital changes), shall be sent, unless notification to another
department is expressly provided for herein, by telecopy to DTC's Reorganization
Department at (212) 709-1093 or (212) 709-1094 and receipt of such notice shall
be confirmed by telephoning (212) 709-6884, or by mail or any other means to:
Manager, Reorganization Department
Reorganization Window
The Depository Trust Company
7 Hanover Square, 23rd Floor
New York, New York 10004-2695
7. All notices and payment advices sent to DTC shall contain the CUSIP
number or numbers of the Preferred Securities and the accompanying designation
B-3
<PAGE>
of the Preferred Securities, which, as of the date of this letter, is "Rouse
Capital ____% Cumulative Quarterly Income Preferred Securities".
8. Distribution payments or other cash payments with respect to the
Preferred Securities evidenced by the Global Certificate shall be governed by
DTC's current Principal and Income Payments Rider, a copy of which is attached
hereto as Annex I. For purposes of this letter, the term "Agent" used in Annex I
shall be deemed to refer to First Chicago.
9. DTC may direct the Issuer and First Chicago to use any other telecopy
number or address of DTC as the number or address to which notices or payments
may be sent.
10. In the event of a conversion, redemption, or any other similar
transaction (e.g., tender made and accepted in response to the
- -
Issuer's or First Chicago's invitation) necessitating a reduction in the
aggregate number of Preferred Securities outstanding evidenced by the Global
Certificate, DTC, in its discretion: (a) may request the Issuer or First
Chicago to issue and countersign a new Global Certificate; or (b) may make an
appropriate notation on the Global Certificate indicating the date and amount of
such reduction.
11. DTC may discontinue its services as a securities depositary with
respect to the Preferred Securities at any time by giving reasonable prior
written notice to the Issuer and First Chicago (at which time DTC will confirm
with the Issuer or First Chicago the aggregate number of Preferred Securities
deposited with it) and discharging its responsibilities with respect thereto
under applicable law. Under such circumstances, the Issuer may determine to make
alternative arrangements for book-entry settlement for the Preferred Securities,
make available one or more separate global certificates evidencing Preferred
Securities to any Participant having Preferred Securities credited to its DTC
account, or issue definitive Preferred Securities to the beneficial holders
thereof, and in any such case, DTC agrees to cooperate fully with the Issuer and
First Chicago and to return the Global Certificate, duly endorsed for transfer
as directed by the Issuer or First Chicago, together with any other documents of
transfer reasonably requested by the Issuer or First Chicago.
12. In the event that the Issuer determines that beneficial owners of
Preferred Securities shall be able to obtain definitive Preferred Securities,
the Issuer or First Chicago shall notify DTC of the availability of
certificates. In such event, the Issuer or First Chicago shall issue, transfer
and exchange certificates in appropriate amounts, as required by DTC and others,
and DTC agrees to cooperate fully with the Issuer and First Chicago and to
return the Global Certificate, duly endorsed for transfer as directed by the
B-4
<PAGE>
Issuer or First Chicago, together with any other documents of transfer
reasonably requested by the Issuer or First Chicago.
13. This letter may be executed in any number of counterparts, each of
which when so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument. This
letter shall be governed by and construed in accordance with the laws of the
State of New York.
Nothing herein shall be deemed to require First Chicago to advance funds on
behalf of the Issuer.
Very truly yours,
ROUSE CAPITAL
(As Issuer)
By: The Rouse Company
By:_______________________________________
Name:
Title:
THE FIRST NATIONAL BANK OF CHICAGO,
Trustee
By: ______________________________________
Name:
Title:
RECEIVED AND ACCEPTED:
THE DEPOSITORY TRUST COMPANY
By:____________________________
Authorized Officer
B-5
<PAGE>
EXHIBIT C
THIS CERTIFICATE IS NOT TRANSFERABLE
Certificate Number Number of Common Securities
C-
Certificate Evidencing Common Securities
of
ROUSE CAPITAL
Common Securities
(liquidation amount U.S. $25 per Common Security)
Rouse Capital, a statutory business trust formed under the laws of the
State of Delaware (the "Trust"), hereby certifies that The Rouse Company (the
"Holder") is the registered owner of__________________________________________
common securities of the Trust representing beneficial interests in the assets
of the Trust and designated the Common Securities (liquidation amount U.S. $25
per Common Security) (the "Common Securities"). In accordance with, and except
as provided by, Section 5.10 of the Trust Agreement (as defined below) the
Common Securities are not transferable and any attempted transfer hereof shall
be void. The designations, rights, privileges, restrictions, preferences and
other terms and provisions of the Common Securities are set forth in, and this
certificate and the Common Securities represented hereby are issued and shall in
all respects be subject to the terms and provisions of, the Amended and Restated
Trust Agreement of the Trust dated as of ______ __, 1995, as the same may be
amended from time to time (the "Trust Agreement"), including the designation of
the terms of the Common Securities as set forth therein. The Trust will furnish
a copy of the Trust Agreement to the Holder without charge upon written request
to the Trust at its principal place of business or registered office.
Upon receipt of this certificate, the Holder hereof is bound by the Trust
Agreement and is entitled to the benefits thereunder.
<PAGE>
IN WITNESS WHEREOF, one of the Administrative Trustees of the Trust has executed
this certificate this ___ day of _______, 1995.
ROUSE CAPITAL
By:___________________________
Administrative Trustee
Registered and Countersigned by
The First National Bank of Chicago
By:_______________________________
C-2
<PAGE>
EXHIBIT D
AGREEMENT AS TO EXPENSES AND LIABILITIES
AGREEMENT dated as of _______ __, 1995, between The Rouse Company, a
Maryland corporation ("Rouse"), and Rouse Capital, a Delaware business trust
(the "Trust") .
WHEREAS, the Trust intends to issue and sell its Common Securities (the
"Common Securities") to and receive Debentures from Rouse and to issue and sell
Rouse Capital ____% Cumulative Quarterly Income Preferred Securities (the
"Preferred Securities") with such powers, preferences and special rights and
restrictions as are set forth in the Amended and Restated Trust Agreement of the
Trust dated as of _______ __, 1995 as the same may be amended from time to time
(the "Trust Agreement");
WHEREAS, Rouse is the issuer of the Debentures;
NOW, THEREFORE, in consideration of the purchase by each holder of the
Preferred Securities, which purchase Rouse hereby agrees shall benefit Rouse and
which purchase Rouse acknowledges will be made in reliance upon the execution
and delivery of this Agreement, Rouse and the Trust hereby agree as follows:
ARTICLE I
Section 1.01. Guarantee by Rouse. Subject to the terms and conditions hereof,
------------------
Rouse hereby irrevocably and unconditionally guarantees to each person or entity
to whom the Trust is now or hereafter becomes indebted or liable (the
"Creditors") the full payment, when and as due, of any and all Obligations (as
hereinafter defined) to such Creditors. As used herein, "Obligations" means any
indebtedness, expenses or liabilities of the Trust, other than obligations of
----- ----
the Trust to pay to holders of any Preferred Securities or Common Securities (as
defined in the Trust Agreement) in the Trust the amounts due such holders
pursuant to the terms of the Preferred Securities or Common Securities, as the
case may be. This Agreement is intended to be for the benefit of, and to be
enforceable by, all such Creditors, whether or not such Creditors have received
notice hereof.
Section 1.02. Term of Agreement. This Agreement shall terminate and be of no
-----------------
further force and effect upon the date on which there are no Creditors
remaining; provided, however, that this Agreement shall continue to be effective
-------- -------
or shall be reinstated, as the case may be, if at any time any Creditor must
restore payment of any
<PAGE>
sums paid under any Obligation for any reason whatsoever. This Agreement is
continuing, irrevocable, unconditional and absolute.
Section 1.03. Waiver of Notice. Rouse hereby waives notice of acceptance of
----------------
this Agreement and of any Obligation to which it applies or may apply, and Rouse
hereby waives presentment, demand for payment, protest, notice of nonpayment,
notice of dishonor, notice of redemption and all other notices and demands.
Section 1.04. No Impairment. The obligations, covenants, agreements and duties
-------------
of Rouse under this Agreement shall in no way be affected or impaired by reason
of the happening from time to time of any of the following:
(a) the extension of time for the payment by the Trust of all or any portion of
the Obligations or for the performance of any other obligation under,
arising out of, or in connection with, the Obligations;
(b) any failure, omission, delay or lack of diligence on the part of the
Creditors to enforce, assert or exercise any right, privilege, power or
remedy conferred on the Creditors with respect to the Obligations or any
action on the part of the Trust granting indulgence or extension of any
kind; or
(c) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition or
readjustment of debt, or other similar proceedings affecting, the Trust or
any of the assets of the Trust.
There shall be no obligation of the Creditors to give notice to, or obtain the
consent of, Rouse with respect to the happening of any of the foregoing.
Section 1.05. Enforcement. A Creditor may enforce this Agreement directly
-----------
against Rouse and Rouse waives any right or remedy to require that any action be
brought against the Trust or any other person or entity before proceeding
against Rouse.
ARTICLE II
Section 2.01. Binding Effect. All guarantees and agreements contained in this
--------------
Agreement shall bind the successors, assigns, receivers, trustees and
representatives of Rouse and shall inure to the benefit of the Creditors.
Section 2.02. Amendment. So long as there remains any Creditor or any
---------
Preferred Securities of any series are outstanding, this Agreement shall not be
modified or amended in any manner adverse to such Creditor or to the holders of
the Preferred Securities.
D-2
<PAGE>
Section 2.03. Notices. Any notice, request or other communication required or
-------
permitted to be given hereunder shall be given in writing by delivering the same
against receipt therefor by facsimile transmission (confirmed by mail), telex or
by registered or certified mail, addressed as follows (and if so given, shall be
deemed given when mailed or upon receipt of an answer-back, if sent by telex),
to wit:
Rouse Capital
c/o The First National Bank of Chicago
One First National Plaza
Mail Suite 0126
Chicago, IL 60670-0126
Facsimile No.: (312) 407-2088.
Attention: Corporate Trust Services Division
(with a copy to:
The First National Bank of Chicago
One First National Plaza
Mail Suite 0126
Chicago, IL 60670-0126
Facsimile No.: (312) 407-2088.
Attention: Corporate Trust Services Division)
The Rouse Company
10275 Little Patuxent Parkway
Columbia, MD 21044-3456
Facsimile No.: (410) 992-6363
Attention: Treasurer
(with a copy to the attention of the
Secretary and to the Administrative Trustees
Facsimile No.: (410) 992-6363)
Section 2.04 THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
D-3
<PAGE>
THIS AGREEMENT is executed as of the day and year first above written.
THE ROUSE COMPANY
By:_______________________________
Name:
Title:
ROUSE CAPITAL
By:_______________________________
Name:
Title:
D-4
<PAGE>
EXHIBIT E
This Preferred Security is a Global Certificate within the meaning of
the Trust Agreement hereinafter referred to and is registered in the name of The
Depository Trust Company (the "Depository") or a nominee of the Depository. This
Preferred Security is exchangeable for Preferred Securities registered in the
name of a person other than the Depository or its nominee only in the limited
circumstances described in the Trust Agreement and no transfer of this Preferred
Security (other than a transfer of this Preferred Security as a whole by the
Depository to a nominee of the Depository or by a nominee of the Depository to
the Depository or another nominee of the Depository) may be registered except in
limited circumstances.
Unless this Preferred Security is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York, New
York) to Rouse Capital or its agent for registration of transfer, exchange or
payment, and any Preferred Security issued is registered in the name of Cede &
Co. or such other name as requested by an authorized representative of The
Depository Trust Company and any payment hereon is made to Cede & Co., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS
WRONGFUL since the registered owner hereof, Cede & Co., has an interest herein.
Certificate Number Number of Preferred Securities
P-
CUSIP NO.
__________
Certificate Evidencing Preferred Securities
of
ROUSE CAPITAL
____% Cumulative Quarterly Income Preferred Securities,
(liquidation amount U.S. $25 per Preferred Security)
Rouse Capital, a statutory business trust formed under the laws of the
State of Delaware (the "Trust"), hereby certifies that Cede & Co. (the "Holder")
is the registered owner of ______________________________________________
preferred securities of the Trust representing a beneficial interest in the
assets of the Trust and designated the Rouse Capital ____% Cumulative Quarterly
Income Preferred Securities (liquidation amount U.S. $25 per Preferred Security)
(the "Preferred Securities"). The Preferred Securities are transferable on the
books and records of the Trust, in person or by
<PAGE>
a duly authorized attorney, upon surrender of this certificate duly endorsed and
in proper form for transfer as provided in Section 5.04 of the Trust Agreement
(as defined below). The designations, rights, privileges, restrictions,
preferences and other terms and provisions of the Preferred Securities are set
forth in, and this certificate and the Preferred Securities represented hereby
are issued and shall in all respects be subject to the terms and provisions of,
the Amended and Restated Trust Agreement of the Trust dated as of _______ __,
1995, as the same may be amended from time to time (the "Trust Agreement"),
including the designation of the terms of Preferred Securities as set forth
therein. The holder of this certificate is entitled to the benefits of the
Guarantee Agreement entered into by The Rouse Company, a Maryland corporation,
and The First National Bank of Chicago, as guarantee trustee, dated as of
_______ __, 1995 (the "Guarantee") to the extent provided therein. The Trust
will furnish a copy of the Trust Agreement and the Guarantee to the Holder of
this certificate without charge upon written request to the Trust at its
principal place of business or registered office.
Upon receipt of this certificate, the holder of this certificate is
bound by the Trust Agreement and is entitled to the benefits thereunder.
IN WITNESS WHEREOF, one of the Administrative Trustees of the Trust has
executed this certificate this ___ day of _______, 1995.
Rouse Capital
By:____________________________
Administrative Trustee
Registered and Countersigned by
The First National Bank of Chicago
By:_______________________________
E-2
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred
Security to:
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
agent to transfer this Preferred Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date:__________________
Signature:________________________
(Sign exactly as your name appears on the other side of this Preferred Security
Certificate)
E-3
<PAGE>
EXHIBIT 4.3
DRAFT 11/17/95
THE ROUSE COMPANY
TO
THE FIRST NATIONAL BANK OF CHICAGO
TRUSTEE
______________________
INDENTURE
DATED AS OF _________, 1995
----------------------
_____________/*/
__% JUNIOR SUBORDINATED DEBENTURES
DUE 2025
- --------------------
/*/ Up to $____________ if the Underwriters referred to herein exercise an
over-allotment option.
<PAGE>
Certain Sections of this Indenture relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939:
Trust Indenture Indenture
Act Section Section
- ------------------- --------------------
Section 310(a)(1) ................................... 609
(a)(2) ................................... 609
(a)(3) ................................... Not Applicable
(a)(4) ................................... Not Applicable
(b) ................................... 608, 610
Section 311(a) ................................... 613
(b) ................................... 613
Section 312(a) ................................... 701
................................... 702(a)
(b) ................................... 702(b)
(c) ................................... 702(c)
Section 313(a) ................................... 703(a)
(b) ................................... 703(a)
(c) ................................... 703(a)
(d) ................................... 703(b)
Section 314(a) ................................... 704
(a)(4) ................................... 101, 1004
(b) ................................... Not Applicable
(c)(1) ................................... 102
(c)(2) ................................... 102
(c)(3) ................................... Not Applicable
(d) ................................... Not Applicable
(e) ................................... 101, 102
Section 315(a)(1) ................................... 601
(a)(2) ................................... 603
(b) ................................... 602
(c) ................................... 601
(d) ................................... 601
(e) ................................... 514
Section 316(a) ................................... 101
(a)(1)(A) ................................... 502
................................... 512
(a)(1)(B) ................................... 513
(a)(2) ................................... Not Applicable
(b) ................................... 508
(c) ................................... 104(c)
Section 317(a)(1) ................................... 503
(a)(2) ................................... 504
(b) ................................... 1003
Section 318(a) ................................... 107
- -----------------------
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE ONE
Definitions and other Provisions of General Application
SECTION 101. Definitions................................................ 2
SECTION 102. Compliance Certificates and Opinions....................... 10
SECTION 103. Form of Documents Delivered to Trustee..................... 10
SECTION 104. Acts of Holders; Record Dates.............................. 10
SECTION 105. Notices, Etc., to Trustee and the Company.................. 12
SECTION 106. Notice to Holders; Waiver.................................. 12
SECTION 107. Conflict with Trust Indenture Act.......................... 13
SECTION 108. Effect of Headings and Table of Contents................... 13
SECTION 109. Successors and Assigns..................................... 13
SECTION 110. Separability Clause........................................ 13
SECTION 111. Benefits of Indenture...................................... 13
SECTION 112. Governing Law.............................................. 13
SECTION 113. Legal Holidays............................................. 13
ARTICLE TWO
Security Forms
SECTION 201. Forms Generally............................................ 14
SECTION 202. Form of Face of Security................................... 14
SECTION 203. Form of Reverse of Security................................ 17
SECTION 204. Form of Trustee's Certificate of Authentication............ 20
SECTION 205. Form of Legend for Global Securities....................... 20
SECTION 206. Securities in Global Form.................................. 21
ARTICLE THREE
The Securities
SECTION 301. Title and Terms............................................ 21
SECTION 302. Denominations.............................................. 23
SECTION 303. Execution, Authentication, Delivery and Dating............. 23
SECTION 304. Temporary Securities....................................... 24
SECTION 305. Registration, Registration of Transfer and Exchange........ 24
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities........... 27
SECTION 307. Payment of Interest; Interest Rights Preserved............. 28
SECTION 308. Persons Deemed Owners...................................... 29
SECTION 309. Cancellation............................................... 29
SECTION 310. Computation of Interest.................................... 29
SECTION 311. Right of Set-Off........................................... 30
SECTION 312. CUSIP Numbers.............................................. 30
- -----------------
Note: This table of contents shall not, for any purpose, be deemed to be a
part of the Indenture.
(i)
<PAGE>
Page
----
ARTICLE FOUR
Satisfaction and Discharge
SECTION 401. Satisfaction and Discharge of Indenture..................... 30
SECTION 402. Application of Trust Money.................................. 31
ARTICLE FIVE
Remedies
SECTION 501. Events of Default.......................................... 32
SECTION 502. Acceleration of Maturity; Rescission and Annulment......... 33
SECTION 503. Collection of Indebtedness and Suits for Enforcement
by Trustee................................................. 34
SECTION 504. Trustee May File Proofs of Claim........................... 35
SECTION 505. Trustee May Enforce Claims Without Possession of
Securities................................................. 35
SECTION 506. Application of Money Collected............................. 35
SECTION 507. Limitation on Suits........................................ 36
SECTION 508. Unconditional Right of Holders to Receive Principal
and Interest............................................... 37
SECTION 509. Restoration of Rights and Remedies......................... 37
SECTION 510. Rights and Remedies Cumulative............................. 37
SECTION 511. Delay or Omission Not Waiver............................... 37
SECTION 512. Control by Holders......................................... 38
SECTION 513. Waiver of Past Defaults.................................... 38
SECTION 514. Undertaking for Costs...................................... 38
SECTION 515. Waiver of Usury, Stay or Extension Laws.................... 39
ARTICLE SIX
The Trustee
SECTION 601. Certain Duties and Responsibilities........................ 39
SECTION 602. Notice of Defaults......................................... 39
SECTION 603. Certain Rights of Trustee.................................. 40
SECTION 604. Not Responsible for Recitals or Issuance of Securities..... 41
SECTION 605. May Hold Securities........................................ 41
SECTION 606. Money Held in Trust........................................ 41
SECTION 607. Compensation; Reimbursement and Indemnity.................. 41
SECTION 608. Disqualification; Conflicting Interests.................... 42
SECTION 609. Corporate Trustee Required; Eligibility.................... 42
SECTION 610. Resignation and Removal; Appointment of Successor.......... 42
SECTION 611. Acceptance of Appointment by Successor..................... 44
SECTION 612. Merger, Conversion, Consolidation or Succession to
Business................................................... 44
SECTION 613. Preferential Collection of Claims Against Company.......... 44
- -----------------
Note: This table of contents shall not, for any purpose, be deemed to be a
part of the Indenture.
(ii)
<PAGE>
Page
----
ARTICLE SEVEN
Holders' Lists and Reports by Trustee and Company
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders. 45
SECTION 702. Preservation of Information; Communications to Holders.... 45
SECTION 703. Reports by Trustee........................................ 46
SECTION 704. Reports by Company........................................ 46
ARTICLE EIGHT
Consolidation, Merger, Conveyance, Transfer or Lease
SECTION 801. Company May Consolidate, Etc., Only on Certain Terms...... 46
SECTION 802. Successor Substituted..................................... 47
ARTICLE NINE
Supplemental Indentures
SECTION 901. Supplemental Indentures Without Consent of Holders........ 47
SECTION 902. Supplemental Indentures with Consent of Holders........... 48
SECTION 903. Execution of Supplemental Indentures...................... 49
SECTION 904. Effect of Supplemental Indentures......................... 50
SECTION 905. Conformity with Trust Indenture Act....................... 50
SECTION 906. Reference in Securities to Supplemental Indentures........ 50
ARTICLE TEN
Covenants; Representations and Warranties
SECTION 1001. Payment of Principal and Interest......................... 50
SECTION 1002. Maintenance of Office or Agency........................... 50
SECTION 1003. Money for Security Payments to Be Held in Trust........... 51
SECTION 1004. Statement by Officers as to Default....................... 52
SECTION 1005. Additional Covenants...................................... 52
ARTICLE ELEVEN
Subordination of Securities
SECTION 1101. Securities Subordinate to Senior Indebtedness............. 53
SECTION 1102. Payment Over of Proceeds upon Dissolution, etc............ 53
SECTION 1103. Payment Permitted If No Default........................... 55
SECTION 1104. Subrogation to Rights of Holders of Senior Indebtedness... 55
SECTION 1105. Provisions Solely to Define Relative Rights............... 56
SECTION 1106. Trustee to Effectuate Subordination....................... 56
SECTION 1107. No Waiver of Subordination Provisions..................... 56
- -----------------
Note: This table of contents shall not, for any purpose, be deemed to be a
part of the Indenture.
(iii)
<PAGE>
Page
----
SECTION 1108. Notice to Trustee........................................ 57
SECTION 1109. Reliance on Judicial Order or Certificate of Liquidating
Agent.................................................... 58
SECTION 1110. Rights of Trustee as a Holder of Senior Indebtedness;
Preservation of Trustee's Rights......................... 58
SECTION 1111. Article Applicable to Paying Agents...................... 58
ARTICLE TWELVE
Redemption of Securities
SECTION 1201. Optional Redemption; Conditions to Optional Redemption... 59
SECTION 1202. Applicability of Article................................. 59
SECTION 1203. Election to Redeem; Notice to Trustee.................... 59
SECTION 1204. Selection by Trustee of Securities to Be Redeemed........ 60
SECTION 1205. Notice of Redemption..................................... 60
SECTION 1206. Deposit of Redemption Price.............................. 61
SECTION 1207. Securities Payable on Redemption Date.................... 61
SECTION 1208. Securities Redeemed in Part.............................. 61
- -----------------
Note: This table of contents shall not, for any purpose, be deemed to be a
part of the Indenture.
(iv)
<PAGE>
INDENTURE, dated as of _________, 1995, between The Rouse Company, a
corporation duly organized and existing under the laws of the State of Maryland
(herein called the "Company"), having its principal office at 10275 Little
Patuxent Parkway, Columbia, Maryland, 21044-3456 and The First National Bank of
Chicago, a national banking association, as Trustee (herein called the
"Trustee"). Unless otherwise defined herein, all capitalized terms used herein
shall have the meanings ascribed to them in the Amended and Restated Trust
Agreement, dated as of ________, 1995 (the "Trust Agreement"), among the
Company, as Depositor, The First National Bank of Chicago, as the property
trustee thereunder, Michael J. Majchrzak, as the Delaware trustee thereunder,
and the administrative trustees named therein as in effect on the date hereof,
the form of which is attached as Annex A hereto.
RECITALS OF THE COMPANY
WHEREAS, Rouse Capital may pursuant to the Underwriting Agreement (the
"Underwriting Agreement"), dated __________, 1995, among the Company, Rouse
Capital and the Underwriters named therein issue $____________ (or up to
$__________ if the Underwriters' overallotment option is exercised) aggregate
liquidation preference of its __% Cumulative Quarterly Income Preferred
Securities (the "Preferred Securities") with a liquidation amount of $25 per
Preferred Security;
WHEREAS, the Company is guaranteeing the payment of distributions on
the Preferred Securities, and payment of the Redemption Price (as defined in the
Trust Agreement) and payments on liquidation with respect to the Preferred
Securities, to the extent provided in the Guarantee Agreement, dated _________,
1995 (the "Parent Guarantee"), between the Company and The First National Bank
of Chicago, as guarantee trustee, for the benefit of the holders of the
Preferred Securities;
WHEREAS, (i) the Company wishes to sell to Rouse Capital, and Rouse
Capital wishes to purchase from the Company, Securities (as defined below) in an
aggregate principal amount equal to $____________ (or up to $____________ if the
Underwriters' over-allotment option is exercised in full), and in satisfaction
of the purchase price for such Securities, the administrative trustees of Rouse
Capital, on behalf of Rouse Capital, will deliver to the Company the sum of
$____________ (or $____________ if the over-allotment is exercised in full) and
(ii) Rouse Capital wishes to sell to the Company, and the Company wishes to
purchase from Rouse Capital, Common Securities certificates evidencing an
ownership interest in Rouse Capital, registered in the name of the Company,
having an aggregate liquidation amount of $____________ (or $____________ if the
over-allotment option is exercised in full) and in satisfaction of the purchase
price for such Common Securities, the Company will deliver to Rouse Capital
<PAGE>
the sum of $____________ or ($____________ if the overallotment option is
exercised in full);
WHEREAS, the Company has duly authorized the creation of an issue of
its __% Junior Subordinated Debentures due 2025 (the "Securities") of the tenor
and amount hereinafter set forth and to provide therefor, the Company has duly
authorized the execution and delivery of this Indenture; and
WHEREAS, all things necessary to make the Securities, when executed by
the Company and authenticated and delivered hereunder and duly issued by the
Company, the valid obligations of the Company, and to make this Indenture a
valid agreement of the Company, in accordance with their and its terms,
respectively, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually agreed, for the equal and
proportionate benefit of all Holders of the Securities, as follows:
ARTICLE ONE
Definitions and other Provisions
of General Application
SECTION 101. Definitions.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act (as defined below), either directly or by reference therein, have
the meanings assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles, and, except as otherwise expressly provided herein, the term
"generally accepted accounting principles" with respect to any computation
acquired or permitted hereunder shall mean such accounting principles as are
generally accepted at the date of such computation; and
-2-
<PAGE>
(4) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
"Act", when used with respect to any Holder (as defined below), has
the meaning specified in Section 104.
"Additional Interest Attributable to Deferral" means interest that
shall accrue on any interest on the Securities that is in arrears for more than
one quarter or not paid during an Extension Period (as defined below), which in
either case shall accrue at the rate of __% per annum compounded quarterly.
"Additional Interest Attributable to Taxes" means, if Rouse Capital is
required to pay any taxes, duties, assessments or governmental charges of
whatever nature (other than withholding taxes) imposed by the United States or
any other taxing authority, such amounts as shall be required so that the net
amounts received by Rouse Capital and available for distribution to holders of
the Preferred Securities and the Common Securities by Rouse Capital after paying
such taxes, duties, assessments or governmental charges shall not be less than
the amounts Rouse Capital would have received had no such taxes, duties,
assessments or governmental charges been imposed.
"Additional Interest" means the sum of Additional Interest
Attributable to Deferral and Additional Interest Attributable to Taxes.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Board of Directors" means either the board of directors of the
Company or any duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" means a day other than (x) a Saturday or a Sunday, (y)
a day on which banks in the State of Maryland or The City of New York are
authorized or obligated by law or executive order to remain closed or (z) a day
on which the Corporate
-3-
<PAGE>
Trust Office of the Trustee, or the principal office of the Property Trustee
under the Trust Agreement, is closed for business.
"Capital Stock" of the Company means any and all shares, interests,
participations or other equivalents (however designated) of the Company's
capital stock (including, without limitation, common stock and preferred stock)
or other equity interests whether now outstanding or issued after the date of
this Indenture.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Securities Exchange Act of 1934, as
amended, or, if at any time after the execution of this instrument such
Commission is not existing and performing the duties now assigned to it under
the Trust Indenture Act, then the body performing such duties at such time.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman, a Vice Chairman, its
President, its Chief Executive Officer or a Vice President, and by its
Treasurer, or Assistant Treasurer, its Secretary or an Assistant Secretary, and
delivered to the Trustee.
"Corporate Trust Office" means the principal office of the Trustee in
New York, New York, at which at any particular time its corporate trust business
shall be administered and which at the date of this Indenture is The First
National Bank of Chicago, c/o First Chicago Trust Company of New York, 14 Wall
Street, 8th Floor - Window 2, New York, New York 10005, Attention: Corporate
Trust Administration.
"corporation" means a corporation, association or company, including
without limitation, a limited liability company, joint-stock company or business
trust.
"Defaulted Interest" has the meaning specified in Section 307.
"Depositary" means a clearing agency registered under the Securities
Exchange Act of 1934, as amended, that is designated to act as Depositary for
the Securities in global form until a successor Depositary shall have become
such pursuant to the applicable provisions of this Indenture, and thereafter
"Depositary" shall mean such successor Depositary.
"Equity Issuance" means (i) an issuance by the Company of its Capital
Stock, or (ii) a PIPS Issuance (as defined below).
-4-
<PAGE>
"Event of Default" has the meaning specified in Section 501.
"Expense Agreement" has the meaning assigned to such term in the Trust
Agreement.
"Extension Period" has the meaning assigned in Section 301.
"Federal Bankruptcy Code" means the Bankruptcy Act of Title 11 of the
United States Code, as amended from time to time.
"Global Security" means a Security that evidences all or part of the
Securities, bears the legend set forth in Section 205 and is authenticated and
delivered to, and registered in the name of, the Depositary for such Securities
or a nominee thereof.
"Holder" means a Person in whose name a Security is registered in the
Security Register (as defined below).
"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
including, for all purposes of this instrument and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and to govern this instrument and any such supplemental indenture,
respectively.
"Interest Payment Date", when used with respect to any installment of
interest on a Security, means the date specified in such Security as the fixed
date on which an installment of interest with respect to the Securities is due
and payable.
"Maturity", when used with respect to any Security, means the date on
which the principal of such Security becomes due and payable as therein or
herein provided, whether at the Stated Maturity or by declaration of
acceleration, call for redemption or otherwise.
"Notice of Default" means a written notice of the kind specified in
Section 501(3).
"Officers' Certificate" means a certificate signed by (i) the
Chairman, a Vice Chairman, the President, the Chief Executive Officer, a Vice
President, or the Treasurer of the Company and (ii) the Secretary or an
Assistant Secretary of the Company and delivered to the Trustee; provided,
however, that such certificate may be signed by two of the officers or directors
listed in clause (i) above in lieu of being signed by one of such officers or
directors listed in such clause (i) and one of the officers listed in clause
(ii) above. One of the officers signing an Officer's Certificate given pursuant
to Section 1004
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<PAGE>
shall be the principal executive, financial or accounting officer of the
Company. Any Officers' Certificate delivered with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers'
Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company, and who shall be reasonably acceptable to the Trustee.
"Outstanding", when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except: (i) Securities theretofore canceled by the
Trustee or delivered to the Trustee for cancellation; (ii) Securities for whose
payment or redemption money in the necessary amount has been theretofore
deposited with the Trustee or any Paying Agent (other than the Company) in trust
or set aside and segregated in trust by the Company (if the Company shall act as
its own Paying Agent) for the Holders of such Securities; provided that, if such
Securities are to be redeemed, notice of such redemption has been duly given
pursuant to this Indenture or provision therefor satisfactory to the Trustee has
been made; and (iii) Securities which have been paid pursuant to Section 306, or
in exchange for or in lieu of which other Securities have been authenticated and
delivered pursuant to this Indenture, other than any such Securities in respect
of which there shall have been presented to the Trustee proof satisfactory to it
that such Securities are held by a bona fide purchaser in whose hands such
Securities are valid obligations of the Company; provided, however, that in
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determining whether the Holders of the required principal amount of Outstanding
Securities have given or concurred in any request, demand, authorization,
direction, notice, consent or waiver hereunder, Securities owned by the Company
or any other obligor upon the Securities, or any Affiliate of the Company (other
than Rouse Capital) or such other obligor, shall be disregarded, except that for
the purposes of determining whether the Trustee shall be protected in relying on
any such
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<PAGE>
request, demand, authorization, direction, notice, consent or waiver, only
Securities which the Trustee knows are so owned shall be so disregarded.
"Parent Guarantee" has the meaning specified in the Recitals to this
instrument.
"Paying Agent" means any Person authorized by the Company to pay the
principal of or interest on any Securities on behalf of the Company which shall
initially be The First National Bank of Chicago.
"Person" means any individual, corporation, partnership, joint
venture, trust, company, including without limitation, a limited liability
company, association, joint stock company, business trust or corporation,
unincorporated organization or government or any agency or political subdivision
thereof.
"PIPS Issuance" means an issuance by any Affiliate of the Company of
periodic income preferred securities which are substantially comparable in
economic effect to the Preferred Securities, the proceeds of which are invested
in debt securities of the Company which are substantially comparable in economic
effect to the Securities.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.
"Preferred Securities" has the meaning specified in the Recitals to
this instrument.
"Redemption Date", when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price", when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Regular Record Date" for the interest payable on any Interest Payment
Date means the Business Day next preceding such Interest Payment Date; provided,
--------
however, that if the Securities cease to be held by the Property Trustee, the
- -------
relevant record date shall be 15 days prior to the relevant Interest Payment
Date.
"Representative" means an indenture trustee or other trustee, agent or
representative for an issue of Senior Indebtedness.
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<PAGE>
"Responsible Officer", when used with respect to the Trustee, means
the chairman or any vice-chairman of the board of directors, the chairman or any
vice-chairman of the executive committee of the board of directors, the chairman
of the trust committee, the president, any vice president, the secretary, any
assistant secretary, the treasurer, any assistant treasurer, the cashier, any
assistant cashier, any trust officer or assistant trust officer, the controller
or any assistant controller or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.
"Securities" has the meaning specified in the Recitals to this
instrument.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.
"Senior Indebtedness" means the principal of, premium, if any,
interest on and any other payment due pursuant to any of the following, whether
outstanding at the date hereof or hereafter incurred, created or assumed: (i)
all indebtedness of the Company (other than any obligations to trade creditors)
evidenced by notes, debentures, bonds or other securities sold by the Company
for money borrowed and capitalized lease obligations of the Company that would
be capitalized on a balance sheet of the Company prepared in accordance with
generally accepted accounting principles; (ii) all indebtedness of others of the
kinds described in the preceding clause (i) with an express written obligation
of the Company to repay the principal or other amount of the debt during the
full term of the indebtedness; and (iii) all renewals, extensions or refundings
of indebtedness of the kinds described in either of the preceding clauses (i) or
(ii), unless, in the case of any particular indebtedness, lease obligation,
guarantee, renewal, extension or refunding, the instrument creating or
evidencing the same or the assumption or guarantee of the same expressly
provides that such indebtedness, lease obligation, renewal, extension or
refunding is expressly made pari passu with or subordinate to the Securities.
---- -----
"Special Record Date" for the payment of any Defaulted Interest means
a date fixed by the Trustee pursuant to Section 307.
"Stated Maturity", when used with respect to any Security or any
installment of interest thereon, means the date specified in such Security as
the fixed date on which the principal, together with any accrued and unpaid
interest (including Additional Interest), of such Security or such installment
of interest is due and payable.
"Subsidiary" means any Person a majority of the equity ownership or
the voting stock of which is at the time owned, directly or indirectly, by the
Company or by
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<PAGE>
one or more other Subsidiaries, or by the Company and one or more other
Subsidiaries. For the purposes of this definition, "voting stock" means stock
which ordinarily has voting power for the election of directors, whether at all
times or only so long as no senior class of stock has such voting power by
reason of any contingency.
"Tax Event" means the receipt by Rouse Capital or the Company, as the
case may be, of an opinion of counsel experienced in such matters to the effect
that, as a result of (a) any amendment to, clarification of, or change
(including any announced prospective change) in, the laws or treaties (or any
regulations thereunder) of the United States or any political subdivision or
taxing authority thereof or therein affecting taxation, or (b) any judicial
decision, official administrative pronouncement, ruling, regulatory procedure,
notice or announcement (including any notice or announcement of intent to adopt
such procedures or regulations) ("Administrative Action"), or (c) any amendment
to, clarification of, or change in the official position or the interpretation
of such Administrative Action or judicial decision or any interpretation or
pronouncement that provides for a position with respect to such Administrative
Action or judicial decision that differs from the theretofore generally accepted
position, in each case, by any legislative body, court, governmental authority
or regulatory body, irrespective of the manner in which such amendment,
clarification or change is made known, which amendment, clarification, or change
is effective or such pronouncement or decision is announced on or after the date
of the first issuance of the Preferred Securities, there is more than an
insubstantial risk that (i) Rouse Capital is, or will be, subject to United
States federal income tax with respect to interest received on the Securities,
(ii) interest payable by the Company on the Securities is not, or will not be,
fully deductible for United States federal income tax purposes, or (iii) Rouse
Capital is, or will be, subject to more than a de minimis amount of other taxes,
----------
duties or other governmental charges other than franchise and other similar
taxes.
"Trust Agreement" has the meaning specified in the first paragraph of
this Indenture.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean such successor Trustee.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in
force at the date as of which this instrument was executed; provided, however,
that in the event the Trust Indenture Act of 1939 is amended after such date,
"Trust Indenture Act" means, to the extent required by any such amendment, the
Trust Indenture Act of 1939 as so amended.
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<PAGE>
"Vice President", when used with respect to the Company or the
Trustee, means any vice president, whether or not designated by a number or a
word or words added before or after the title "vice president".
SECTION 102. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, the Company shall furnish to
the Trustee such certificates and opinions as may be required under the Trust
Indenture Act. Each such certificate or opinion shall be given in the form of
an Officers' Certificate, if to be given by an officer of the Company, or an
Opinion of Counsel, if to be given by counsel, and shall comply with the
requirements of the Trust Indenture Act and any other requirement set forth in
this Indenture.
SECTION 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or opinion of counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person in required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form any instrument.
SECTION 104. Acts of Holders; Record Dates.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders may be
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<PAGE>
embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by agent duly appointed in writing;
and, except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Trustee and,
where it is hereby expressly required, to the Company. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Holders signing such instrument or
instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Indenture
and (subject to Section 601) conclusive in favor of the Trustee and the Company,
if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where
such execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing or the authority of the Person executing the same, may also be proved in
any other manner which the Trustee deems sufficient.
(c) The Company may, in the circumstances permitted by the Trust
Indenture Act, fix any day as the record date for the purpose of determining the
Holders entitled to give or take any request, demand, authorization, direction,
notice, consent, waiver or other action, or to vote on any action, authorized or
permitted to be given or taken by Holders. If not set by the Company prior to
the first solicitation of a Holder made by any Person in respect of any such
action, or, in the case of any such vote, prior to such vote, the record date
for any such action or vote shall be the 30th day (or, if later, the date of the
most recent list of Holders required to be provided pursuant to Section 701)
prior to such first solicitation or vote, as the case may be. With regard to
any record date, only the Holders on such date (or their duly designated
proxies) shall be entitled to give or take, or vote on, the relevant action.
(d) The ownership of Securities shall be proved by the Security
Register.
(e) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Security shall bind every future Holder
of the same Security and the Holder of every Security issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee or the
Company in reliance thereon, whether or not notation of such action is made upon
such Security.
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<PAGE>
SECTION 105. Notices, Etc., to Trustee and the Company.
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Indenture to
be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be sufficient
for every purpose hereunder if made, given, furnished or filed in writing
to or with the Trustee at its Corporate Trust Office, Attention: Corporate
Trust Trustee Administration, or
(2) the Company by the Trustee or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided) if
in writing and mailed, first-class postage prepaid, return receipt
requested or sent by a nationally recognized overnight mail service to the
Company addressed to it at the address of its principal office specified in
the first paragraph of this instrument or at any other address previously
furnished in writing to the Trustee by the Company.
SECTION 106. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at its address as it appears in the Security Register, not later
than the latest date (if any), and not earlier than the earliest date (if any),
prescribed for the giving of such notice. In any case where notice to Holders
is given by mail, neither the failure to mail such notice, nor any defect in a
notice so mailed, to any particular Holder shall affect the sufficiency of such
notice with respect to other Holders. Where this Indenture provides for notice
in any manner, such notice may be waived in writing by the Person entitled to
receive such notice, either before or after the event, and such waiver shall be
the equivalent of such notice. Waivers of notice by Holders shall be filed with
the Trustee, but such filing shall not be a condition precedent to the validity
of any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by mail,
then such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.
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<PAGE>
SECTION 107. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with a
provision of the Trust Indenture Act that is required under such Act to be a
part of and govern this Indenture, the latter provision shall control. If any
provision of this Indenture modifies or excludes any provision of the Trust
Indenture Act that may be so modified or excluded, the latter provision shall be
deemed to apply to this Indenture as so modified or to be excluded, as the case
may be.
SECTION 108. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
SECTION 109. Successors and Assigns.
All covenants and agreements contained in this Indenture of the
Company shall bind its successors and assigns, whether so expressed or not.
SECTION 110. Separability Clause.
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 111. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder, the holders of Senior Indebtedness, the holders of Preferred
Securities (to the extent provided herein) and the Holders of Securities, any
benefit or any legal or equitable right, remedy or claim under this Indenture.
SECTION 112. GOVERNING LAW.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, BUT WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW.
SECTION 113. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security shall not be a Business Day, then (notwithstanding any
other provision of this Indenture or of the Securities) payment of interest or
principal of the
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<PAGE>
Securities shall be made on the next succeeding day which is a Business Day (and
without any interest or other payment in respect of any such delay) except that,
if such Business Day is in the next succeeding calendar year, such payment of
interest or principal of the Securities, as the case may be, shall be made on
the immediately preceding Business Day, in each case, with the same force and
effect as if made on the Interest Payment Date or Redemption Date, or at the
Stated Maturity.
ARTICLE TWO
Security Forms
SECTION 201. Forms Generally.
The Securities and the Trustee's certificates of authentication shall
be in substantially the forms set forth in this Article, with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture, and may have such letters, numbers or other marks
of identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange or as may,
consistently herewith, be determined by the officers executing such Securities,
as evidenced by their execution of the Securities.
If at any time the Securities are no longer held solely by the
Property Trustee, the Company may make such changes, additions and deletions to
the form of Securities herein provided for in order to reflect the holding of
the Securities by a Person or Persons other than the Property Trustee.
The definitive Securities shall be printed, lithographed or engraved
or produced by any combination of these or other methods, all as determined by
the officers executing such Securities, as evidenced by their execution of such
Securities.
SECTION 202. Form of Face of Security.
THE ROUSE COMPANY
__% Junior Subordinated Debenture
due 2025
No. _____________ $________
CUSIP No. ________
THE ROUSE COMPANY, a corporation duly organized and existing under the
laws of the State of Maryland (herein called "Rouse", which term includes any
successor corporation under the Indenture hereinafter referred to), for value
received, hereby promises to pay to ________________, or registered assigns, the
principal sum of
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<PAGE>
________ DOLLARS ($________) on ____________, 2025 and to pay interest on said
principal sum from _________, 1995 or from the most recent interest payment date
(each such date, an "Interest Payment Date") to which interest has been paid or
duly provided for, quarterly (subject to deferral as set forth herein) in
arrears on March 31, June 30, September 30 and December 31 of each year,
commencing ____________, 1995, at the rate of __% per annum plus Additional
Interest, if any, until the principal hereof shall have become due and payable,
and at a rate of __% per annum, compounded quarterly, on any overdue principal.
The amount of interest payable for any period will be computed on the basis of
twelve 30-day months and a 360-day year. In the event that any date on which
interest is payable on this Security is not a Business Day, then a payment of
the interest payable on such date will be made on the next succeeding day which
is a Business Day (and without any interest or other payment in respect of any
such delay), except that, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding Business
Day, in each case with the same force and effect as if made on the date the
payment was originally payable. A "Business Day" shall mean any day other than a
Saturday or a Sunday or a day on which banking institutions in Maryland or The
City of New York are authorized or required by law or executive order to remain
closed or a day on which the Corporate Trust Office of the Trustee, or the
principal office of the property trustee under the Trust Agreement (as defined
in the Indenture), is closed for business. The interest installment so payable,
and punctually paid or duly provided for, on any Interest Payment Date will, as
provided in the Indenture, be paid to the Person in whose name this Security (or
one or more Predecessor Securities, as defined in the Indenture) is registered
at the close of business on the Regular Record Date for such interest
installment, which, so long as the Property Trustee shall be the sole holder of
all of the Securities, shall be the close of business on the Business Day next
preceding such Interest Payment Date. Any such interest installment not so
punctually paid or duly provided for shall forthwith cease to be payable to the
Holder on such Regular Record Date and may either be paid to the Person in whose
name this security (or one or more Predecessor Securities) is registered at the
close of business on a Special Record Date for the payment of such Defaulted
Interest to be fixed by the Trustee, notice whereof shall be given to Holders of
Securities not less than 10 days prior to such Special Record Date, or be paid
at any time in any other lawful manner not inconsistent with the requirements of
any securities exchange on which the Securities may be listed, and upon such
notice as may be required by such exchange, all as more fully provided in said
Indenture. Rouse shall have the right at any time during the term of this
Security, from time to time, to extend the interest payment period of such
Security for up to 20 consecutive quarters (each, an "Extension Period"), during
which periods interest will compound quarterly and Rouse shall have the right to
make partial payments of interest on any Interest Payment Date, and at the end
of which Rouse shall pay all interest then accrued and unpaid (together with
Additional Interest thereon); provided that Rouse shall not defer the interest
payment period with respect to Additional Interest Attributable
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to Taxes; provided further that during any such Extension Period, Rouse shall
not declare or pay any dividend or distribution (other than a dividend or
distribution in common stock of Rouse or other security junior in right of
payment to the Securities) on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of its outstanding Capital Stock, or
make any guarantee payments with respect to the foregoing (other than payments
under the Parent Guarantee) or repurchase, or cause any of the Subsidiaries to
repurchase, any security of Rouse ranking pari passu with or subordinate to this
---- -----
Security (except on a ratable basis with securities ranking pari passu with this
---- -----
Security). Prior to the termination of any such Extension Period, Rouse may
further extend the interest payment period, provided that such Extension Period
together with all such previous and further extensions thereof shall not exceed
20 consecutive quarters or extend beyond the Maturity of this Security. Upon the
termination of any such Extension Period and upon the payment of all accrued and
unpaid interest and any Additional Interest then due, Rouse may select a new
Extension Period, subject to the foregoing requirements. No interest shall be
due and payable during an Extension Period except at the end thereof. Rouse
shall give the Holder of this Security and the Trustee notice of its selection
of an Extension Period at least ten Business Days prior to the earlier of (i)
the Interest Payment Date or (ii) the date Rouse Capital is required to give
notice to The New York Stock Exchange, Inc. or other applicable self-regulatory
organization or to holders of the Preferred Securities of the record date or the
date such distributions are payable, but in any event not less than two Business
Days prior to such record date. Payment of the principal of and interest on this
Security will be made at the office or agency of Rouse maintained for that
purpose in the United States, in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts; provided, however, that at the option of Rouse payment of
interest may be made (i) by check mailed to the address of the Person entitled
thereto as such address shall appear in the Security Register or (ii) by wire
transfer in immediately available funds at such place and to such account as may
be designated by the Person entitled thereto as specified in the Security
Register.
The indebtedness evidenced by this Security is, to the extent provided
in the Indenture, subordinate and subject in right of payment to the prior
payment in full of all Senior Indebtedness, and this Security is issued subject
to the provisions of the Indenture with respect thereto. Each Holder of this
Security, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on his behalf to take such
action as may be necessary or appropriate to effectuate the subordination so
provided and (c) appoints the Trustee its attorney-in-fact for any and all such
purposes. Each Holder hereof, by his acceptance hereof, waives all notice of
the acceptance of the subordination provisions contained herein and in the
Indenture of each holder of Senior Indebtedness, whether now outstanding or
hereafter incurred, and waives reliance by each such holder upon said
provisions. Reference is hereby made to the further provisions of
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<PAGE>
the Indenture summarized on the reverse hereof, which further provisions shall
for all purposes have the same effect as if set forth at this place. Unless the
certificate of authentication hereon has been executed by the Trustee referred
to on the reverse hereof by manual signature, this Security shall not be
entitled to any benefit under the Indenture or be valid or obligatory for any
purpose.
IN WITNESS WHEREOF, The Rouse Company has caused this instrument to be
duly executed under its corporate seal.
Dated: ,
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THE ROUSE COMPANY
By:
------------------------------------
Name:
Title:
Attest:
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SECTION 203. Form of Reverse of Security.
This Security is one of a duly authorized issue of Securities of
Rouse, designated as its __% Junior Subordinated Debentures due 2025 (herein
called the "Securities"), limited in aggregate principal amount to the sum of
(a) $____________ and (b) the aggregate liquidation preference of the Preferred
Securities purchased by the Underwriters at the Second Time of Delivery (both as
defined in the Underwriting Agreement) pursuant to the Underwriting Agreement
divided by 0.97, issued under an Indenture, dated as of _________, 1995 (herein
called the "Indenture"), between Rouse and The First National Bank of Chicago,
as Trustee (herein called the "Trustee", which term includes any successor
trustee under the Indenture), to which Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective rights,
limitations of rights, duties and immunities thereunder of the Trustee, Rouse
and the Holders of the Securities and holders of the Preferred Securities, and
of the terms upon which the Securities are, and are to be, authenticated and
delivered.
All terms used in this Security but not defined have the meanings
assigned to them in the Indenture or in the Trust Agreement.
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<PAGE>
At any time on or after ____________, 2000, Rouse shall have the
right, subject to the terms and conditions of Article Twelve of the Indenture,
to redeem this Security, without premium or penalty, in whole or in part, at a
Redemption Price equal to 100% of the principal amount to be redeemed plus
accrued but unpaid interest, including any Additional Interest, to the
Redemption Date with the proceeds of one or more Equity Issuances, but interest
installments whose Stated Maturity is on or prior to such Redemption Date will
be payable to the Holders of such Securities, or one or more Predecessor
Securities, of record at the close of business on the relevant Record Dates
referred to on the face hereof, all as provided in the Indenture. Rouse shall
not redeem the Securities in part unless (a) all accrued and unpaid interest
(including any Additional Interest) has been paid in full on all Securities
Outstanding for all quarterly interest periods terminating on or prior to the
Redemption Date and (b) no Extension Period is in effect. If a Tax Event (as
defined in the Indenture) shall occur and be continuing, Rouse shall have the
right, subject to the terms and conditions of Article Twelve of the Indenture,
to redeem this Security without premium or penalty, in whole but not in part, at
a Redemption Price equal to 100% of the principal amount thereof plus accrued
but unpaid interest, including any Additional Interest to the Redemption Date,
but interest installments whose Stated Maturity is on or prior to such
Redemption Date will be payable to the Holders of such Securities, or one or
more Predecessor Securities, of record at the close of business on the relevant
Record Dates referred to on the face hereof, all as provided in the Indenture.
Any redemption pursuant to this paragraph will be made upon not less than 30 nor
more than 60 days' notice, at the Redemption Price. If the Securities are only
partially redeemed by Rouse, the Securities will be redeemed pro rata, by lot or
in such other manner as the Trustee shall deem appropriate and fair in its
discretion and that may provide for the selection of a portion or portions
(equal to twenty-five U.S. dollars ($25) or any integral multiple thereof) of
the principal amount of any Security.
In the event of redemption of this Security in part only, a new
Security or Securities for the unredeemed portion hereof will be issued in the
name of the Holder hereof upon the cancellation hereof.
If an Event of Default with respect to the Securities shall occur and
be continuing, the principal of the Securities may be declared due and payable
in the manner, with the effect and subject to the conditions provided in the
Indenture.
The Indenture contains provisions for satisfaction and discharge at
any time of the entire indebtedness of this Security upon compliance by Rouse
with certain conditions set forth in the Indenture.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of
Rouse and the
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rights of the Holders of the Securities under the Indenture at any time by Rouse
and the Trustee with the consent of the Holders of a majority in aggregate
principal amount of the Securities at the time Outstanding.
The Indenture also contains provisions permitting Holders of specified
percentages in principal amount of the Securities at the time Outstanding, on
behalf of the Holders of all Securities, to waive compliance by Rouse with
certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the registration
of transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Security.
As set forth in, and subject to, the provisions of the Indenture, no
Holder of any Security will have any right to institute any proceeding with
respect to the Indenture or for any remedy thereunder, unless (i) such Holder
shall have previously given to the Trustee written notice of a continuing Event
of Default, (ii) the Holders of not less than 25% in principal amount of the
Outstanding Securities shall have made written request, and offered reasonable
indemnity, to the Trustee to institute such proceeding as trustee, (iii) the
Trustee shall have failed to institute such proceeding within 60 days and (iv)
the Trustee shall not have received from the Holders of a majority in principal
amount of the Outstanding Securities a direction inconsistent with such request
during such 60 day period; provided, however, that such limitations do not apply
-------- --------
to a suit instituted by the Holder hereof for the enforcement of payment of
principal of or any interest on this Security on or after the respective due
date expressed herein.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of Rouse, which is
absolute and unconditional, to pay the principal of and interest on this
Security at the times, place and rate, and in the coin or currency, herein
prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of Rouse in New York, New York, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to Rouse
and the Security Registrar duly executed by, the Holder hereof or his attorney
duly authorized in writing, and thereupon one or more new Securities, of
authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees. No service charge shall be
made for any such registration of transfer or exchange, but Rouse may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith.
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Prior to due presentment of this Security for registration of
transfer, Rouse, the Trustee and any agent of Rouse or the Trustee may treat the
Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security shall be overdue, and neither Rouse, the
Trustee nor any such agent shall be affected by notice to the contrary.
The Securities are issuable only in registered form without coupons in
denominations of $25 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, Securities are
exchangeable for a like aggregate principal amount of Securities of a different
authorized denomination, as requested by the Holder surrendering the same.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS
OF LAWS PRINCIPLES THEREOF.
SECTION 204. Form of Trustee's Certificate of Authentication.
This is one of the Securities referred to in the within-mentioned
Indenture.
The First National Bank of Chicago,
as Trustee
By:
----------------------------------
Authorized Signatory
SECTION 205. Form of Legend for Global Securities.
Every Global Security authenticated and delivered hereunder shall bear
a legend in substantially the following form:
This Security is a Global Security within the meaning of the Indenture
hereinafter referred to and is registered in the name of a Depositary
or a nominee thereof. This Security may not be transferred to, or
registered or exchanged for Securities registered in the name of, any
Person other than the Depositary or a nominee thereof and no such
transfer may be registered, except in the limited circumstances
described in the Indenture. Every Security authenticated and
delivered upon registration of transfer of, or in exchange for or in
lieu of, this Security shall be a Global Security subject to the
foregoing, except in such limited circumstances.
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SECTION 206. Securities in Global Form.
If Securities are distributed to the holders of the Preferred
Securities pursuant to a dissolution of Rouse Capital in accordance with the
terms of the Trust Agreement, such Securities initially will be issued in global
form. A Security in global form shall represent such of the outstanding
Securities as shall be specified therein and may provide that it shall represent
the aggregate amount of Outstanding Securities from time to time endorsed
thereon and that the aggregate amount of Outstanding Securities represented
thereby may from time to time be reduced to reflect exchanges. Any endorsement
of a Security in global form to reflect the amount, or any increase or decrease
in the amount, of Outstanding Securities represented thereby shall be made by
the Trustee and in such manner as shall be specified in such Security. Any
instructions by the Company with respect to a Security in global form, after its
initial issuance, shall be in writing but need not comply with Section 102.
ARTICLE THREE
The Securities
SECTION 301. Title and Terms.
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is limited to the sum of (a)
$____________ and (b) the aggregate liquidation preference of the Preferred
Securities purchased by the Underwriters on the Second Time of Delivery pursuant
to and in accordance with the terms and provisions of the Underwriting Agreement
divided by 0.97, except for Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other securities
pursuant to Section 304, 305, 306, 906 or 1208.
The Securities shall be known and designated as the "__% Junior
Subordinated Debentures due 2025" of the Company. Their Stated Maturity shall
be ___________, 2025, and they shall bear interest at the rate of __% per annum,
from ___________, 1995 or from the most recent Interest Payment Date to which
interest has been paid or duly provided for, as the case may be, payable
quarterly (subject to deferral as set forth herein), in arrears, on March 31,
June 30, September 30 and December 31 of each year, commencing ___________, 1995
until the principal thereof is paid or made available for payment. Interest
will compound quarterly and will accrue at the rate of __% per annum on any
interest installment in arrears for more than one quarter, or any overdue
principal and during an extension of an interest payment period as set forth
below in this Section 301. In the event that any date on which interest is
payable on the Securities is not a Business Day, then a payment of the interest
payable on such date will be made on the next succeeding day which is a Business
Day (except that, if such
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Business Day is in the next succeeding calendar year, such Interest Payment Date
shall be the immediately preceding Business Day) and without any interest or
other payment in respect of any such delay.
The Company shall have the right, at any time during the term of the
Securities, from time to time to extend the interest payment period for up to 20
consecutive quarters (the "Extension Period") during which period interest will
compound quarterly and the Company shall have the right to make partial payments
of interest on any Interest Payment Date, and at the end of which the Company
shall pay all interest then accrued and unpaid thereon (together with Additional
Interest); provided that the Company shall not defer the interest payment period
with respect to Additional Interest Attributable to Taxes; and provided further
that during any such Extension Period, the Company shall not declare or pay any
dividend or distribution (other than a dividend or distribution in common stock
of the Company or other security junior in right of payment to the Securities)
on, or redeem purchase, acquire or make a liquidation payment with respect to,
any of its Capital Stock, or make any guarantee payments with respect to the
foregoing (other than payments under the Parent Guarantee) or repurchase, or
cause any of its Subsidiaries to repurchase, any securities of the Company
ranking pari passu with or subordinate to the Securities (except on a ratable
---- -----
basis with securities ranking pari passu with the Securities). Prior to the
---- -----
termination of any such Extension Period, the Company may further extend the
interest payment period, provided that such Extension Period together with all
such previous and further extensions thereof shall not exceed 20 consecutive
quarters or extend beyond the Maturity of the Securities. Upon the termination
of any Extension Period and upon the payment of all accrued and unpaid interest
and any Additional Interest then due, the Company may select a new Extension
Period, subject to the foregoing requirements. Except for Additional Interest
Attributable to Taxes, no interest shall be due and payable during an Extension
Period, except at the end thereof. The Company shall give Rouse Capital and the
Trustee notice of its selection of such Extension Period subject to the above
requirements at least ten Business Days prior to the earlier of (i) the Interest
Payment Date or (ii) the date Rouse Capital is required to give notice to The
New York Stock Exchange, Inc. or other applicable self-regulatory organization
or to holders of the Preferred Securities of the record date or the date such
distributions are payable, but in any event not less than two Business Days
prior to such record date. If the Property Trustee is the sole Holder of the
Securities, the Trustee shall promptly notify the holders of the Preferred
Securities of the Company's selection of such an Extension Period. If the
Property Trustee ceases to be the sole Holder of the Securities, the Company
shall give the Trustee and the Holders of the Securities notice of its selection
of such Extension Period subject to the above requirements at least ten Business
Days prior to the earlier of (i) the Interest Payment Date or (ii) the date that
the Company is required to give notice to The New York Stock Exchange, Inc. or
other applicable self-regulatory organization, or to the Holders of the
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Securities, of the record or payment date of such related interest payment, but
in no event less than two Business Days prior to such record date.
The principal of and interest on the Securities shall be payable (i)
in the case of all Securities represented by one or more Global Securities
registered in the name of a Depositary or its nominee, to such Depositary or
such nominee and (ii) in the case of any Securities issued in definitive
registered form, to the Persons in whose names the Securities are registered at
the office or agency of the Company in the United States maintained for such
purpose and at any other office or agency maintained by the Company for such
purpose in such coin or currency of the United States of America as at the time
of payment is legal tender for payment of public and private debts; provided,
however, that, except with respect to a Global Security, at the option of the
Company payment of interest may be made (i) by check mailed to the address of
the Person entitled thereto as such address shall appear in the Security
Register or (ii) by wire transfer in immediately available funds at such place
and to such account as may be designated by the Person entitled thereto as
specified in the Security Register; and provided further that for so long as any
Security is registered in the name of the Property Trustee, payment of principal
(including the Redemption Price and interest) shall be made by wire transfer in
immediately available funds at such place and to such account as may be
designated by the Property Trustee.
The Securities shall be subordinated in right of payment to Senior
Indebtedness as provided in Article Eleven. The Securities shall be senior in
right of payment to the Parent Guarantee.
The Securities shall be redeemable as provided in Article Twelve.
SECTION 302. Denominations.
The Securities shall be issuable only in registered form, without
coupons, and only in denominations of $25 and any integral multiple thereof.
SECTION 303. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by its
Chairman, one of its Vice Chairman, its President, its Chief Executive Officer,
or one of its Vice Presidents, under its corporate seal reproduced thereon and
attested by its Secretary or one of its Assistant Secretaries. The signature of
any of these officers on the securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices
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prior to the authentication and delivery of such Securities or did not hold such
offices at the date of such Securities.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities executed by the Company to
the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities; and the Trustee in accordance
with such Company Order shall authenticate and deliver such Securities as in
this Indenture provided and not otherwise.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder.
SECTION 304. Temporary Securities.
Pending the preparation of definitive Securities, the Company may
execute, and upon Company Order the Trustee shall authenticate and deliver,
temporary Securities which are printed, lithographed, typewritten, mimeographed
or otherwise produced, in any authorized denomination, substantially of the
tenor of the definitive Securities in lieu of which they are issued and with
such appropriate insertions, omissions, substitutions and other variations as
the officers executing such Securities may determine, as evidenced by their
execution of such Securities.
If temporary Securities are issued, the Company will cause definitive
Securities to be prepared without unreasonable delay. After the preparation of
definitive Securities, the temporary Securities shall be exchangeable for
definitive Securities upon surrender of the temporary Securities at any office
or agency of the Company designated pursuant to Section 1002, without charge to
the Holder. Upon surrender for cancellation of any one or more temporary
Securities the Company shall execute and the Trustee shall authenticate and
deliver in exchange therefor a like principal amount of definitive Securities of
authorized denominations. Until so exchanged the temporary Securities shall in
all respects be entitled to the same benefits under this Indenture as definitive
Securities.
SECTION 305. Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust Office of
the Trustee a register (the register maintained in such office and in any other
office or agency
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designated pursuant to Section 1002 being herein sometimes collectively referred
to as the "Security Register") in which, subject to such reasonable regulations
as it may prescribe, the Company shall provide for the registration of
Securities and transfers of Securities. The Trustee is hereby appointed
"Security Registrar" for the purpose of registering Securities and transfers of
Securities as herein provided.
Upon surrender for registration of transfer of any Security at an
office or agency of the Company designated pursuant to Section 1002 for such
purpose, the Company shall execute, and the Trustee shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Securities of any authorized denominations and of a like aggregate principal
amount.
At the option of the Holder, Securities (except Global Securities) may
be exchanged for other Securities of any authorized denominations and of a like
aggregate principal amount, upon surrender of the Securities to be exchanged at
such office or agency. Whenever any Securities are so surrendered for exchange,
the Company shall execute, and the Trustee shall authenticate and deliver, the
Securities which the Holder making the exchange is entitled to receive.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer
or for exchange shall (if so required by the Company or the Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed, by the
Holder thereof or its attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 304, 906 or 1208 not involving any transfer.
If the Securities are to be redeemed in part, the Company will not be
required to issue, register the transfer of or exchange any Securities during a
period beginning at the opening of business 15 days before the day of mailing of
a notice of redemption of any such Securities that may be selected for
redemption and ending at the close of business on the day of such mailing,
except the unredeemed portion of any such Securities being redeemed in part.
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Notwithstanding any other provision in this Indenture, no Global
Security may be transferred to, or registered or exchanged for Securities
registered in the name of, any Person other than the Depositary for such Global
Security or any nominee thereof, and no such transfer may be registered, unless
(1) such Depositary (A) notifies the Company that it is unwilling or unable to
continue as Depositary for such Global Security or (B) has ceased to be a
clearing agency registered under the Securities Exchange Act of 1934, as
amended, as more fully set forth below (2) the Company executes and delivers to
the Trustee a Company Order that such Global Security shall be so transferable,
registrable and exchangeable, (3) there shall have occurred and be continuing an
Event of Default with respect to the Securities evidenced by such Global
Security or (4) there shall exist such other circumstances, if any, as have been
specified for this purpose as contemplated in such Global Security.
Notwithstanding any other provision in this Indenture, a Global Security to
which the restriction set forth in the preceding sentence shall have ceased to
apply may be transferred only to, and may be registered and exchanged for
Securities registered only in the name or names of, such Person or Persons as
the Depositary for such Global Security shall have directed and no transfer
thereof other than such a transfer may be registered.
Every Security authenticated and delivered upon registration of
transfer of, or in exchange for or in lieu of, a Global Security to which the
restriction set forth in the first sentence of the preceding paragraph shall
apply, whether pursuant to this Section, Section 304, 306, 906 or 1208 or
otherwise, shall be authenticated and delivered in the form of, and shall be, a
Global Security unless such Security is registered in the name of a Person other
than the Depositary for such Global Security or a nominee thereof.
If at any time the Depositary for a Global Security notifies the
Company that it is unwilling or unable to continue as Depositary for such Global
Security or if at any time the Depositary for a Global Security ceases to be a
clearing agency registered under the Securities Exchange Act of 1934, as
amended, at a time when such Depositary is required to be so registered in order
to act as a Depositary, the Company shall appoint a successor Depositary with
respect to such Global Security. If a successor Depositary for such Global
Security is not appointed by the Company within 90 days after the Company
receives such notice or becomes aware of such condition, the Company shall
execute, and the Trustee, upon receipt of a Company Order for the authentication
and delivery of definitive Securities, shall authenticate and deliver Securities
in definitive registered form in an aggregate principal amount equal to the
principal amount of the Global Security in exchange for such Global Security.
Upon the exchange of a Global Security for Securities in definitive
registered form, in authorized denominations, such Global Security shall be
canceled by the Trustee. Securities in definitive registered form issued in
exchange for a Global Security pursuant to this Section 305 shall be registered
in such names and in such
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authorized denominations as the Depositary for such Global Security, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee. The Trustee shall deliver such Securities to or as
directed by the Persons in whose names such Securities are so registered.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security is surrendered to the Trustee, the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of like tenor and principal amount and bearing a number
not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any security
and (ii) such security or indemnity as may be required by them to save each of
them and any agent of either of them harmless, then, in the absence of notice to
the Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and the Trustee shall authenticate and
deliver, in lieu of any such destroyed, lost or stolen Security, a new Security
of like tenor and principal amount and bearing a number not contemporaneously
outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security issued pursuant to this Section in lieu of any
mutilated, destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the mutilated,
destroyed, lost or stolen Security shall be at any time enforceable by anyone,
and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Securities duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.
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SECTION 307. Payment of Interest; Interest Rights Preserved.
Interest on any Security which is payable, and is punctually paid or
duly provided for, on any Interest Payment Date shall be paid to the Person in
whose name that Security (or one or more Predecessor Securities) is registered
at the close of business on the Regular Record Date for such interest.
Any interest on any Security which is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date (herein called
"Defaulted Interest") shall forthwith cease to be payable to the Holder on the
relevant Regular Record Date by virtue of having been such Holder, and such
Defaulted Interest may be paid by the Company, at its election in each case, as
provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names the Securities (or their respective Predecessor
Securities) are registered at the close of business on a Special Record
Date for the payment of such Defaulted Interest, which shall be fixed in
the following manner. The Company shall notify the Trustee in writing of
the amount of Defaulted Interest proposed to be paid on each Security and
the date of the proposed payment, and at the same time the Company shall
deposit with the Trustee an amount of money equal to the aggregate amount
proposed to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit prior to the date
of the proposed payment, such money when deposited to be held in trust for
the benefit of the Persons entitled to such Defaulted Interest as provided
in this clause. Thereupon the Trustee shall fix a Special Record Date for
the payment of such Defaulted Interest which shall be not more than 15 days
and not less than 10 days prior to the date of the proposed payment and not
less than 10 days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Company of such
Special Record Date and, in the name and at the expense of the Company,
shall cause notice of the proposed payment of such Defaulted Interest and
the Special Record Date therefor to be mailed, first-class postage prepaid,
to each Holder at its address as it appears in the Security Register, not
less than 10 days prior to such Special Record Date. Notice of the
proposed payment of such Defaulted Interest and the Special Record Date
therefor having been so mailed, such Defaulted Interest shall be paid to
the Persons in whose names the Securities (or their respective Predecessor
Securities) are registered at the close of business on such Special Record
Date and shall no longer be payable pursuant to the following clause (2).
(2) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any
securities
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exchange on which the Securities may be listed, and, if so listed, upon
such notice as may be required by such exchange, if, after notice given by
the Company to the Trustee of the proposed payment pursuant to this clause,
such manner of payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue (including in each such case Additional Interest),
which were carried by such other Security.
SECTION 308. Persons Deemed Owners.
Prior to due presentment of a Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee shall treat
the Person in whose name such Security is registered as the owner of such
Security for the purpose of receiving payment of principal of and (subject to
Section 307) interest (including Additional Interest) on such Security and for
all other purposes whatsoever, whether or not such Security be overdue, and
neither the Company, the Trustee nor any agent of the Company or the Trustee
shall be affected by notice to the contrary.
None of the Company, the Trustee, any Paying Agent or the Security
Registrar will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests of a Global Security or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interests.
SECTION 309. Cancellation.
All Securities surrendered for payment, redemption, registration of
transfer or exchange shall, if surrendered to any Person other than the Trustee,
be delivered to the Trustee and shall be promptly canceled by it. The Company
may at any time deliver to the Trustee for cancellation any Securities
previously authenticated and delivered hereunder which the Company may have
acquired in any manner whatsoever, and all Securities so delivered shall be
promptly canceled by the Trustee. No Securities shall be authenticated in lieu
of or in exchange for any Securities canceled as provided in this Section,
except as expressly permitted by this Indenture. All canceled Securities held
by the Trustee shall be disposed of as directed by a Company Order.
SECTION 310. Computation of Interest.
Interest on the Securities shall be computed on the basis of a 360-day
year of twelve 30-day months.
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SECTION 311. Right of Set-Off.
Notwithstanding anything to the contrary in the Indenture, the Company
shall have the right to set-off any payment it is otherwise required to make
thereunder to the extent the Company has theretofore made, or is concurrently on
the date of such payment making, a payment under the Parent Guarantee.
SECTION 312. CUSIP Numbers.
The Company in issuing the Securities may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices
of redemption as a convenience to Holders; provided that any such notice may
state that no representation is made as to the correctness of such numbers
either as printed on the Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be affected
by any defect in or omission of such numbers.
ARTICLE FOUR
Satisfaction and Discharge
SECTION 401. Satisfaction and Discharge of Indenture.
This Indenture shall cease to be of further effect (except as to any
surviving rights of registration of transfer or exchange of Securities herein
expressly provided for), and the Trustee, on demand of and at the expense of the
Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and delivered (other
than (i) Securities which have been destroyed, lost or stolen and
which have been replaced or paid as provided in Section 306 and (ii)
Securities for whose payment money has theretofore been deposited in
trust or segregated and held in trust by the Company and thereafter
repaid to the Company or discharged from such trust, as provided in
Section 1003) have been delivered to the Trustee for cancellation; or
(B) all such Securities not theretofore delivered to the Trustee
for cancellation
(i) have become due and payable, or
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(ii) will become due and payable at their Stated Maturity
within one year or
(iii) are to be called for redemption within one year
under arrangements satisfactory to the Trustee for the giving of
notice of redemption by the Trustee in the name, and at the
expense, of the Company
and the Company, in the case of (i), (ii) or (iii) above, has
deposited or caused to be deposited with the Trustee as trust funds in
trust for the purpose an amount sufficient to pay and discharge the
entire indebtedness on such Securities not theretofore delivered to
the Trustee for cancellation, for principal and interest (including
Additional Interest) to the date of such deposit (in the case of
Securities which have become due and payable) or to the Stated
Maturity or Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent
herein provided for relating to the satisfaction and discharge of this
Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to pay Additional Interest Attributable to Taxes, the
obligations of the Company to the Trustee under Section 607 and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of Clause (1) of
this Section, the obligations of the Trustee under Section 402 and the last
paragraph of Section 1003 shall survive.
SECTION 402. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 1003, all
money deposited with the Trustee pursuant to Section 401 shall be held in trust
and applied by it, in accordance with the provisions of the Securities and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal and interest for
whose payment such money has been deposited with the Trustee.
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ARTICLE FIVE
Remedies
SECTION 501. Events of Default.
"Event of Default", wherever used herein, means any one of the
following events that has occurred and is continuing (whatever the reason for
such Event of Default and whether it shall be occasioned by the provisions of
Article Eleven or be voluntary or involuntary or be effected by operation of law
or pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):
(1) failure for 30 days to pay any interest on the Securities,
including any Additional Interest in respect thereof, when due (subject to
the deferral of any due date in the case of an Extension Period); or
(2) failure to pay any principal on the Securities when due whether at
Stated Maturity, upon redemption by declaration or otherwise; or
(3) failure to observe or perform in any material respect any other
covenant herein for 90 days after written notice to the Company from the
Trustee or the holders of at least 25% in principal amount of the
Outstanding Securities specifying such default or breach and requiring it
to be remedied and stating that such notice is a "Notice of Default"
hereunder; or
(4) a decree or order is entered by a court having jurisdiction in the
premises (i) for relief in respect of the Company in an involuntary case or
proceeding under the Federal Bankruptcy Code or any other federal or state
bankruptcy, insolvency, reorganization or similar law or (ii) adjudging the
Company a bankrupt or insolvent, or seeking reorganization, arrangement,
adjustment or composition of or in respect of the Company under the Federal
Bankruptcy Code or any other applicable federal or state law, or appointing
a custodian, receiver, liquidator, assignee, trustee, sequestrator (or
other similar official) of the Company or of any substantial part of any of
its properties, or ordering the winding up or liquidation of any of its
affairs, and any such decree or order remains unstayed and in effect for a
period of 60 consecutive days; or
(5) the Company institutes a voluntary case or proceeding under the
Federal Bankruptcy Code or any other applicable federal or state law or any
other case or proceedings to be adjudicated a bankrupt or insolvent, or the
Company consents to the entry of a decree or order for relief in respect of
the Company in any involuntary case or proceeding under the Federal
Bankruptcy Code or any
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other applicable federal or state law or to the institution of bankruptcy
or insolvency proceedings against the Company, or the Company files a
petition or answer or consent seeking reorganization or relief under the
Federal Bankruptcy Code or any other applicable federal or state law, or
consents to the filing of any such petition or to the appointment of or
taking possession by a custodian, receiver, liquidator, assignee, trustee,
sequestrator (or other similar official) of any of the Company or of any
substantial part of its property, or makes an assignment for the benefit of
creditors, or admits in writing its inability to pay its debts generally as
they become due or takes corporate action in furtherance of any such
action.
In addition to the foregoing rights, upon any Event of Default, the
Property Trustee shall have the right to take any other action it may deem
necessary or desirable as a creditor with respect to the Securities.
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default occurs and is continuing, then and in every
such case the Trustee, the Holders of at least 25% in aggregate principal amount
of the Outstanding Securities or the holders of at least 25% in aggregate
liquidation preference of Preferred Securities then outstanding shall have the
right to declare the principal of and the interest on all the Securities
(including any Additional Interest) and any other amounts payable hereunder to
be due and payable immediately by a written notice to the Company (and to the
Trustee if by the Holders or the holders of the Preferred Securities). Upon any
such declaration, such principal and all accrued interest shall become
immediately due and payable.
At any time after such a declaration of acceleration has been made and
before a judgment or decree for payment of the money due has been obtained by
the Trustee as hereinafter provided in this Article, the Holders of a majority
in principal amount of the Outstanding Securities, in the case of a declaration
of acceleration by the Holders, or the holders of a majority in aggregate
liquidation preference of Preferred Securities then outstanding, in the case of
a declaration by the holders of Preferred Securities, by written notice to the
Company and the Trustee, may rescind and annul such declaration and its
consequences if:
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue interest (including any Additional Interest) on
all Securities,
(B) the principal of any Securities which have become due
otherwise than by such declaration of acceleration and interest
thereon at the rate borne by the Securities, and
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(C) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel; and
(2) all Events of Default, other than the non-payment of the principal
of Securities which have become due solely by such declaration of
acceleration, have been cured or waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any
right consequent thereon.
SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee.
The Company covenants that if
(1) default is made in the payment of any interest (including any
Additional Interest) on any Security when such interest becomes due and
payable and such default continues for a period of 30 days (subject to the
deferral of any due and payable interest in the case of an Extension
Period), or
(2) default is made in the payment of the principal of any Security at
the Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the
benefit of the Holders of such Securities, the whole amount then due and payable
on such Securities for principal and interest (including any Additional
Interest), at the rate borne by the Securities, and, in addition thereto, such
further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
If an Event of Default occurs and is continuing, the Trustee may in
its discretion proceed to protect and enforce its rights and the rights of the
Holders by such appropriate judicial proceedings as the Trustee shall deem most
effective to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 504. Trustee May File Proofs of Claim.
In case of any judicial proceeding relative to the Company (or any
other obligor upon the Securities), its property or its creditors, the Trustee
shall be entitled and empowered, by intervention in such proceeding or
otherwise, to take any and all actions authorized under the Trust Indenture Act
in order to have claims of the Holders and the
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Trustee allowed in any such proceeding. In particular, the Trustee shall be
authorized to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same; and any custodian,
receiver, assignee, trustee, liquidator, sequestrator or other similar official
in any such judicial proceeding is hereby authorized by each Holder to make such
payments to the Trustee and, in the event that the Trustee shall consent to the
making of such payments directly to the Holders, to pay to the Trustee any
amount due it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 607.
No provision of this Indenture shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceeding.
SECTION 505. Trustee May Enforce Claims Without Possession of Securities.
All rights of action and claims under this Indenture or the Securities
may be prosecuted and enforced by the Trustee without the possession of any of
the Securities or the production thereof in any proceeding relating thereto, and
any such proceeding instituted by the Trustee shall be brought in its own name
as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
SECTION 506. Application of Money Collected.
Subject to Article Eleven, any money collected by the Trustee pursuant
to this Article shall be applied in the following order, at the date or dates
fixed by the Trustee and, in case of the distribution of such money on account
of principal or interest (including any Additional Interest), upon presentation
of the Securities and the notation thereon of the payment if only partially paid
and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section
607;
SECOND: To the payment of the amounts then due and unpaid for
principal of and interest (including any Additional Interest) on the
Securities in respect of which or for the benefit of which such money has
been collected, ratably, without preference or priority of any kind,
according to the amounts due and payable on such Securities for principal
and interest (including any Additional Interest), respectively; and
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THIRD: The balance, if any, to the Company.
SECTION 507. Limitation on Suits.
No Holder of any Security or holder of any Preferred Security shall
have any right to institute any proceeding, judicial or otherwise, with respect
to this Indenture, or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless
(1) such Holder or holder of a Preferred Security, as the case may be,
has previously given written notice to the Trustee of a continuing Event of
Default;
(2) the Holders of not less than 25% in aggregate principal amount of
the Outstanding Securities or the holders of not less than 25% in aggregate
liquidation preference of the Preferred Securities, as the case may be,
shall have made written request to the Trustee to institute proceedings in
respect of such Event of Default in its own name as Trustee hereunder;
(3) such Holder or Holders or holder or holders of Preferred
Securities, as the case may be, have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the Holders of a majority in
principal amount of the Outstanding Securities in the case of a proceeding
instituted by a Holder or Holders or by the holders of a majority in
liquidation preference of the outstanding Preferred Securities in the case
of a proceeding instituted by a holder or holders of Preferred Securities;
it being understood and intended that no one or more Holders or holders of
Preferred Securities, as the case may be, shall have any right in any manner
whatever by virtue of, or by availing of, any provision of this Indenture to
affect, disturb or prejudice the rights of any other Holders or holders of
Preferred Securities, as the case may be, or to obtain or to seek to obtain
priority or preference over any other Holders or holders of Preferred
Securities, as the case may be, or to enforce any right under this Indenture,
except in the manner herein provided and for the equal and ratable benefit of
all the Holders or holders of Preferred Securities, as the case may be.
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SECTION 508. Unconditional Right of Holders to Receive Principal and Interest.
Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of and (subject to Section 307) interest
(including any Additional Interest) on such Security on the respective Stated
Maturities (subject, in the case of payments of interest, to the deferral of any
due date in the case of an Extension Period) expressed in such Security (or, in
the case of redemption, on the Redemption Date) and to institute suit for the
enforcement of any such payment, and such rights shall not be impaired without
the consent of such Holder. Any holder of Preferred Securities shall have the
right to institute suit for the enforcement of any such payment to such holder
with respect to Securities having a principal amount equal to the aggregate
liquidation preference of the Preferred Securities held by such holder.
SECTION 509. Restoration of Rights and Remedies.
If the Trustee or any Holder or holder of a Preferred Security has
instituted any proceeding to enforce any right or remedy under this Indenture
and such proceeding has been discontinued or abandoned for any reason, or has
been determined adversely to the Trustee or to such Holder or holder of a
Preferred Security, as the case may be, then and in every such case, subject to
any determination in such proceeding, the Company, the Trustee, the Holders and
the holders of the Preferred Securities shall be restored severally and
respectively to their former positions hereunder and thereafter all rights and
remedies of the Trustee and the Holders and the holders of the Preferred
Securities shall continue as though no such proceeding had been instituted.
SECTION 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities in the last paragraph
of Section 306, no right or remedy herein conferred upon or reserved to the
Trustee, the Holders or the holders of Preferred Securities is intended to be
exclusive of any other right or remedy, and every right and remedy shall, to the
extent permitted by law, be cumulative and in addition to every other right and
remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
SECTION 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee, any Holder of any Security or any
holder of a Preferred Security to exercise any right or remedy accruing upon any
Event of Default shall impair any such right or remedy or constitute a waiver of
any such Event of
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Default or an acquiescence therein. Every right and remedy given by this Article
or by law to the Trustee, to the Holders or to the holders of the Preferred
Securities may be exercised from time to time, and as often as may be deemed
expedient, by the Trustee, the Holders or the holders of the Preferred
Securities, as the case may be.
SECTION 512. Control by Holders.
The Holders of a majority in principal amount of the Outstanding
Securities shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on the Trustee, provided that
(1) such direction shall not be in conflict with any rule of law or
with this Indenture; and
(2) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction.
SECTION 513. Waiver of Past Defaults.
Subject to Section 902 hereof, the Holders of not less than a majority
in principal amount of the Outstanding Securities may on behalf of the Holders
of all the Securities waive any past default hereunder and its consequences,
except a default
(1) in the payment of the principal of or interest (including any
Additional Interest) on any Security (unless such default has been cured
and a sum sufficient to pay all matured installments of interest and
principal due otherwise than by acceleration have been deposited with the
Trustee); or
(2) in respect of a covenant or provision hereof which under Article
Nine cannot be modified or amended without the consent of the Holder of
each Outstanding Security affected.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
SECTION 514. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Trustee for any action taken, suffered or
omitted by it as Trustee, a court may require any party litigant in such court
to file an undertaking to pay the costs of such suit, and may assess costs
against any such party litigant, in the manner and to the
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extent provided in the Trust Indenture Act; provided that neither this Section
nor the Trust Indenture Act shall be deemed to authorize any court to require
such an undertaking or to make such an assessment in any suit instituted by the
Company or the Trustee or in any suit for the enforcement of the right to
receive the principal of and interest (including any Additional Interest) on any
Security.
SECTION 515. Waiver of Usury, Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any usury, stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
ARTICLE SIX
The Trustee
SECTION 601. Certain Duties and Responsibilities.
The duties and responsibilities of the Trustee shall be as provided by
the Trust Indenture Act. Notwithstanding the foregoing, no provision of this
Indenture shall require the Trustee to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of its duties hereunder,
or in the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it. Whether or not therein
expressly so provided, every provision of this Indenture relating to the conduct
or affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section.
SECTION 602. Notice of Defaults.
The Trustee shall give the Holders notice of any default hereunder as
and to the extent provided by the Trust Indenture Act; provided, however, that
in the case of any default of the character specified in Section 501(3), no such
notice to Holders shall be given until at least 30 days after the occurrence
thereof. For the purpose of this Section, the term "default" means any event
which is, or after notice or lapse of time or both would become, an Event of
Default.
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SECTION 603. Certain Rights of Trustee.
Subject to the provisions of Section 601:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed or presented
by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors may be sufficiently evidenced by a
Board Resolution;
(c) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad
faith on its part, rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel of its choice and the written
advice of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction
of any of the Holders pursuant to this Indenture, unless such Holders shall
have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which might be incurred by it in compliance
with such request or direction;
(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further inquiry
or investigation into such facts or matters as it may see fit, and, if the
Trustee shall determine to make such further inquiry or investigation, it
shall be entitled to examine the books, records and premises of the
Company, personally or by agent or attorney;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys,
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and the Trustee shall not be responsible for any misconduct or negligence
on the part of any agent or attorney appointed with due care by it
hereunder; and
(h) the Trustee shall not be liable for any action taken, suffered, or
omitted to be taken by it in good faith and reasonably believed by it to be
authorized or within the discretion or rights or powers conferred upon it
by this Indenture.
SECTION 604. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity or sufficiency of this
Indenture or of the Securities. The Trustee shall not be accountable for the
use or application by the Company of Securities or the proceeds thereof.
SECTION 605. May Hold Securities.
The Trustee, any Paying Agent, any Security Registrar, or any other
agent of the Company, in its individual or any other capacity, may become the
owner or pledgee of Securities and, subject to Sections 608 and 613, may
otherwise deal with the Company with the same rights it would have if it were
not Trustee, Paying Agent, Security Registrar, or such other agent. Money held
by the Trustee in trust hereunder shall not be invested by the Trustee pending
distribution thereof to the holders of the Securities.
SECTION 606. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
otherwise agreed in writing with the Company.
SECTION 607. Compensation; Reimbursement and Indemnity.
The Company agrees
(1) to pay to the Trustee from time to time such reasonable
compensation as the Company and the Trustee shall from time to time agree
in writing for all services rendered by it hereunder (which compensation
shall not be limited by any provision of law in regard to the compensation
of a trustee of an express trust);
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(2) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any provision
of this Indenture (including the reasonable compensation and the expenses
and disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad
faith; and
(3) to indemnify each of the Trustees and any predecessor Trustee for,
and to hold it harmless against, any and all loss, damage, claim, liability
or expense, including taxes (other than taxes based on the income of the
Trustee) incurred without negligence or bad faith on its part, arising out
of or in connection with the acceptance or administration of this trust,
including the costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its
powers or duties hereunder.
The provisions of this Section shall survive the termination of this
Indenture.
SECTION 608. Disqualification; Conflicting Interests.
The Trustee shall comply with the provisions of Section 310(b) of the
Trust Indenture Act.
SECTION 609. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be a
Person that is eligible pursuant to the Trust Indenture Act to act as such and
has a combined capital and surplus of at least $50,000,000. If such Person
publishes reports of condition at least annually, pursuant to law or to the
requirements of said supervising or examining authority, then for the purposes
of this Section, the combined capital and surplus of such Person shall be deemed
to be its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time the Trustee shall cease to be eligible
in accordance with the provisions of this Section, it shall resign immediately
in the manner and with the effect hereinafter specified in this Article.
SECTION 610. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee under Section 611.
(b) The Trustee may resign at any time by giving written notice
thereof to the Company. If an instrument of acceptance by a successor Trustee
shall not have
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been delivered to the Trustee within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
(c) The Trustee may be removed at any time by Act of the Holders of a
majority in principal amount of the Outstanding Securities, delivered to the
Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 608 after written
request therefor by the Company or by any Holder who has been a bona fide
Holder of a Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 609 and shall
fail to resign after written request therefor by the Company or by any
Holder who has been a bona fide Holder of a Security for at least six
months, or
(3) the Trustee shall become incapable of acting or shall be adjudged
a bankrupt or insolvent or a receiver of the Trustee or of its property
shall be appointed or any public officer shall take charge or control of
the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee, or (ii) subject to Section 514, any Holder that has been a bona fide
Holder of a Security for at least six months may, on behalf of itself and all
others similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, the
Company, by a Board Resolution, shall promptly appoint a successor Trustee. If,
within one year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee shall be appointed by Act of the
Holders of a majority in principal amount of the Outstanding Securities
delivered to the Company and the retiring Trustee, the successor Trustee so
appointed shall, forthwith upon its acceptance of such appointment, become the
successor Trustee and supersede the successor Trustee appointed by the Company.
If no successor Trustee shall have been so appointed by the Company or the
Holders and accepted appointment in the manner hereinafter provided, any Holder
that has been a bona fide Holder of a Security for at least six months may, on
behalf of itself and all others similarly situated, petition any court of
competent jurisdiction for the appointment of a successor Trustee.
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(f) The Company shall give notice of each resignation and each removal
of the Trustee and each appointment of a successor Trustee to all Holders in the
manner provided in Section 106. Each notice shall include the name of the
successor Trustee and the address of its Corporate Trust Office.
SECTION 611. Acceptance of Appointment by Successor.
Every successor Trustee appointed hereunder shall execute, acknowledge
and deliver to the Company and to the retiring Trustee an instrument accepting
such appointment, and thereupon the resignation or removal of the retiring
Trustee shall become effective and such successor Trustee, without any further
act, deed or conveyance, shall become vested with all the rights, powers, trusts
and duties of the retiring Trustee; provided that, on request of the Company or
the successor Trustee, such retiring Trustee shall, upon payment of its charges,
execute and deliver an instrument transferring to such successor Trustee all the
rights, powers and trusts of the retiring Trustee and shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder. Upon request of any such successor Trustee,
the Company shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Trustee all such rights, powers and
trusts.
No successor Trustee shall accept its appointment unless at the time
of such acceptance such successor Trustee shall be qualified and eligible under
this Article.
SECTION 612. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities so authenticated with the same
effect as if such successor Trustee had itself authenticated such Securities.
SECTION 613. Preferential Collection of Claims Against Company.
If and when the Trustee shall be or become a creditor of the Company
(or any other obligor upon the Securities), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims against
the Company (or any such other obligor).
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ARTICLE SEVEN
Holders' Lists and Reports by Trustee and Company
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee
(a) semiannually, not later than February 15 and August 15 in each
year, a list, in such form as the Trustee may reasonably require, of the
names and addresses of the Holders as of a date not more than 15 days prior
to the delivery thereof, and
(b) at such other times as the Trustee may reasonably request in
writing, within 30 days after the receipt by the Company of any such
request, a list of similar form and content as of a date not more than 15
days prior to the time such list is furnished;
excluding from any such list names and addresses received by the Trustee in its
capacity as Security Registrar.
SECTION 702. Preservation of Information; Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 701 and the names and
addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 701 upon receipt of a new list so furnished.
(b) The rights of Holders to communicate with other Holders with
respect to their rights under this Indenture or under the Securities, and the
corresponding rights and duties of the Trustee, shall be as provided by the
Trust Indenture Act.
(c) Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the Trustee
nor any agent of either of them shall be held accountable by reason of any
disclosure of information as to names and addresses of Holders made pursuant to
the Trust Indenture Act.
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SECTION 703. Reports by Trustee.
(a) The Trustee shall transmit to Holders such reports concerning the
Trustee and its actions under this Indenture as may be required pursuant to the
Trust Indenture Act at the times and in the manner provided pursuant thereto.
(b) A copy of each such report shall, at the time of such transmission
to Holders, be filed by the Trustee with each stock exchange upon which the
Securities are listed, with the Commission and with the Company. The Company
will notify the Trustee when the Securities are listed on any stock exchange.
SECTION 704. Reports by Company.
The Company shall file with the Trustee and the Commission, and
transmit to Holders, such information, documents and other reports, and such
summaries thereof, as may be required pursuant to the Trust Indenture Act at the
times and in the manner provided pursuant to such Act; provided that any such
information, documents or reports required to be filed with the Commission
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 shall be
filed with the Trustee within 15 days after the same are so required to be filed
with the Commission.
ARTICLE EIGHT
Consolidation, Merger, Conveyance, Transfer or Lease
SECTION 801. Company May Consolidate, Etc., Only on Certain Terms.
The Company shall not consolidate with or merge into any other Person
or convey, transfer or lease its properties and assets substantially as an
entirety to any Person, and the Company shall not permit any Person to
consolidate with, merge into or convey, transfer or lease its properties and
assets substantially as an entirety to the Company, unless:
(1) in case the Company shall consolidate with or merge into another
Person or convey, transfer or lease its properties and assets substantially
as an entirety to any Person, the Person formed by such consolidation or
into which the Company is merged or the Person which acquires by conveyance
or transfer, or which leases, the properties and assets of the Company
substantially as an entirety shall be a corporation, partnership, limited
liability company or trust, shall be organized and validly existing under
the laws of the United States of America, any State thereof or the District
of Columbia and shall expressly assume, by an indenture supplemental
hereto, executed and delivered to the Trustee, in form satisfactory to the
Trustee, the due and punctual payment of the principal of and
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interest (including any Additional Interest) on all the Securities and the
performance or observance of every covenant of this Indenture, the Trust
Agreement, the Parent Guarantee and the Expense Agreement on the part of
the Company to be performed or observed;
(2) immediately after giving effect to such transaction and treating
any indebtedness which becomes an obligation of the Company or a Subsidiary
as a result of such transaction as having been incurred by the Company or
such Subsidiary at the time of such transaction, no Event of Default, and
no event which, after notice or lapse of time or both, would become an
Event of Default, shall have happened and be continuing;
(3) such consolidation or merger or conveyance, transfer or lease of
properties or assets of the Company does not give rise to any breach or
violation of, the Trust Agreement or the Parent Guarantee; and
(4) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that such consolidation, merger,
conveyance, transfer or lease and, if a supplemental indenture is required
in connection with such transaction, such supplemental indenture comply
with this Article and that all conditions precedent herein provided for
relating to such transaction have been complied with.
SECTION 802. Successor Substituted.
Upon any consolidation of the Company with, or merger of the Company
into, any other Person or any conveyance, transfer or lease of the properties
and assets of the Company substantially as an entirety in accordance with
Section 801, the successor Person formed by such consolidation or into which the
Company is merged or to which such conveyance, transfer or lease is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under this Indenture with the same effect as if such successor
Person had been named as the Company herein, and thereafter, except in the case
of a lease, the predecessor Person shall be relieved of all obligations and
covenants under this Indenture and the Securities.
ARTICLE NINE
Supplemental Indentures
SECTION 901. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by a
Board Resolution, and the Trustee, at any time and from time to time, may enter
into one
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or more indentures supplemental hereto, in form satisfactory to the Trustee, for
any of the following purposes:
(1) to evidence the succession of another Person to the Company and
the assumption by any such successor of the covenants of the Company herein
and in the Securities;
(2) to add to the covenants of the Company for the benefit of the
Holders, or to surrender any right or power herein or in the Securities
conferred upon the Company;
(3) to cure any ambiguity or to correct any provision herein which may
be defective or inconsistent with any other provision herein;
(4) to comply with the requirements of the Commission in order to
effect or maintain the qualification of this Indenture under the Trust
Indenture Act, as contemplated by Section 905 or otherwise;
(5) to evidence and provide the acceptance of the appointment of a
successor Trustee hereunder; or
(6) to make any other change that does not adversely affect the rights
of any Holder, including without limitation changes to the form of the
Securities in accordance with Section 201 hereof.
SECTION 902. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority in
principal amount of the Outstanding Securities, by Act of said Holders delivered
to the Company and the Trustee, the Company, when authorized by a Board
Resolution, and the Trustee may enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture or of
modifying in any manner the rights of the Holders under this Indenture;
provided, however, that no such supplemental indenture shall, without the
consent of the Holder of each Outstanding Security affected thereby,
(1) change the Stated Maturity of the principal of, or any installment
of interest (including any Additional Interest) (other than, with respect
to any installment of interest, the deferral of any due date in the case of
an Extension Period in accordance with the provisions of this Indenture)
on, any Security, or reduce the principal amount thereof or the rate of
interest thereon, or change the place of payment where, or the coin or
currency in which, any Security or interest thereon is payable, or impair
the right to institute suit for the enforcement of any
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such payment on or after the Stated Maturity thereof (or, in the case of
redemption, on or after the Redemption Date), or modify the provisions of
this Indenture with respect to the subordination of the Securities in a
manner adverse to the Holders or the holders of the Preferred Securities,
(2) change the place or currency of payment of principal or interest
on the Junior Subordinated Debentures,
(3) change the date on which the Securities may be redeemed by the
Company pursuant to Section 1201 to an earlier date,
(4) reduce the percentage in principal amount of the Outstanding
Securities, the consent of whose Holders is required for any such
supplemental indenture, or the consent of whose Holders is required for any
waiver (of compliance with certain provisions of this Indenture or certain
defaults hereunder and their consequences) provided for in this Indenture,
or
(5) modify any of the provisions of this Section, Section 513 or
Section 1005, except to increase any such percentage or to provide that
certain other provisions of this Indenture cannot be modified or waived
without the consent of the Holder of each Outstanding Security affected
thereby;
provided, that, so long as any of the Preferred Securities remains outstanding,
no such amendment shall be made that adversely affects the holders of the
Preferred Securities and no waiver of any Event of Default or compliance with
any covenant under this Indenture shall be effective, without the prior consent
of the holders of at least a majority of the aggregate liquidation preference of
the outstanding Preferred Securities unless and until the Securities and all
accrued and unpaid interest (including any Additional Interest) thereon have
been paid in full.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
SECTION 903. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 601) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
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SECTION 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
SECTION 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act.
SECTION 906. Reference in Securities to Supplemental Indentures.
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities so modified as to conform, in the opinion of the Trustee and the
Company, to any such supplemental indenture may be prepared and executed by the
Company and authenticated and delivered by the Trustee in exchange for
Outstanding Securities.
ARTICLE TEN
Covenants; Representations and Warranties
SECTION 1001. Payment of Principal and Interest.
The Company will duly and punctually pay the principal of and
interest, including Additional Interest, on the Securities in accordance with
the terms of the Securities and this Indenture.
SECTION 1002. Maintenance of Office or Agency.
The Company will maintain in the United States an office or agency
where Securities may be presented or surrendered for payment, where Securities
may be surrendered for registration of transfer or exchange, and where notices
and demands to or upon the Company in respect of the Securities and this
Indenture may be served. The Company will give prompt written notice to the
Trustee of the location, and any change in the location, of such office or
agency. If at any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee, and the Company hereby appoints the
Trustee as its agent to receive all such presentations, surrenders, notices and
demands.
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The Company may also from time to time designate one or more other
offices or agencies (inside or outside the United States) where the securities
may be presented or surrendered for any or all such purposes and may from time
to time rescind such designations; provided, however, that no such designation
or rescission shall in any manner relieve the Company of its obligation to
maintain an office or agency in the United States for such purposes. The
Company will give prompt written notice to the Trustee of any such designation
or rescission and of any change in the location of any such other office or
agency.
SECTION 1003. Money for Security Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent, it will,
on or at the option of the Company before each due date of the principal of or
interest on any of the Securities, segregate and hold in trust for the benefit
of the Persons entitled thereto a sum sufficient to pay the principal or
interest so becoming due until such sums shall be paid to such Persons or
otherwise disposed of as herein provided and will promptly notify the Trustee of
its action or failure so to act. In such case the Company shall not invest the
amount so segregated and held in trust pending the distribution thereof except
in instruments having a maturity of less than 15 days and issued by the United
States Government.
Whenever the Company shall have one or more Paying Agents, it will,
prior to each due date of the principal of or interest on any Securities,
deposit with a Paying Agent a sum sufficient to pay such amount, such sum to be
held as provided by the Trust Indenture Act, and (unless such Paying Agent is
the Trustee) the Company will promptly notify the Trustee of its action or
failure so to act.
The Company will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will (i) comply with the provisions of the Trust Indenture Act
applicable to it as a Paying Agent and (ii) during the continuance of any
default by the Company (or any other obligor upon the Securities) in the making
of any payment in respect of the Securities, upon the written request of the
Trustee, forthwith pay to the Trustee all sums held in trust by such Paying
Agent as such.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such
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payment by any Paying Agent to the Trustee, such Paying Agent shall be released
from all further liability with respect to such money.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of or interest on any
Security and remaining unclaimed for two years after such principal or interest
has become due and payable shall be paid to the Company on Company Request, or
(if then held by the Company) shall be discharged from such trust; and the
Holder of such Security shall thereafter, as an unsecured general creditor, look
only to the Company for payment thereof, and all liability of the Trustee or
such Paying Agent with respect to such trust money, and all liability of the
Company as trustee thereof, shall thereupon cease; provided, however, that the
Trustee or such Paying Agent, before being required to make any such repayment,
may at the expense of the Company cause to be published once, in a newspaper
published in the English language, customarily published on each Business Day
and of general circulation in The City of New York, notice that such money
remains unclaimed and that, after a date specified therein, which shall not be
less than 30 days from the date of such publication, any unclaimed balance of
such money then remaining will be repaid to the Company.
SECTION 1004. Statement by Officers as to Default.
The Company will deliver to the Trustee, within 120 days after the end
of each fiscal year of the Company ending after the date hereof, an Officers'
Certificate, stating whether or not to the best knowledge of the signers thereof
the Company is in default in the performance and observance of any of the terms,
provisions and conditions of this Indenture (without regard to any period of
grace or requirement of notice provided hereunder) and, if the Company shall be
in default, specifying all such defaults and the nature and status thereof of
which they may have knowledge.
SECTION 1005. Additional Covenants.
The Company covenants and agrees that it will not declare or pay any
dividend or distribution (other than a dividend or distribution in common stock
of the Company or other security junior in right of payment to the Securities)
on, or redeem, purchase, acquire or make a liquidation payment with respect to,
any of its Capital Stock, or make any guarantee payments with respect to the
foregoing (other than payments under the Parent Guarantee), or repurchase, or
cause any of its Subsidiaries to repurchase, any securities of the Company
ranking pari passu with or subordinate to the Securities (except on a ratable
---- -----
basis with securities ranking pari passu with the Securities) if at such time
----------
(i) there shall have occurred any event of which the Company has actual
knowledge that (a) with the giving of notice or the lapse of time or both, would
constitute an Event of Default hereunder and (b) in respect of which the Company
shall not have taken
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reasonable steps to cure, (ii) the Company shall be in default with respect to
its payment of any obligations under the Parent Guarantee or (iii) the Company
shall have given notice of its selection of an Extension Period as provided
herein (which notice shall not have been rescinded) and such period, or any
extension thereof, shall have commenced and be continuing.
The Company also covenants (i) to maintain 100% ownership of the
Common Securities of Rouse Capital; provided, however, that any permitted
successor of the Company hereunder may succeed to the Company's ownership of
such Common Securities, (ii) not to voluntarily dissolve, wind-up or terminate
Rouse Capital, except in connection with a distribution of the Securities to the
holders of Preferred Securities in liquidation of Rouse Capital or in connection
with certain mergers, consolidations or amalgamations permitted by the Trust
Agreement and (iii) to use its reasonable efforts, consistent with the terms and
provisions of the Trust Agreement (including, without limitation, the provisions
permitting Rouse Capital to redeem the Preferred Securities upon the occurrence
of a Tax Event as provided in the Trust Agreement), to cause Rouse Capital to
remain a business trust and not to be classified as an association taxable as a
corporation for United States federal income tax purposes.
ARTICLE ELEVEN
Subordination of Securities
SECTION 1101. Securities Subordinate to Senior Indebtedness.
The Company covenants and agrees, and each Holder of a Security, by
its acceptance thereof, likewise covenants and agrees, that, notwithstanding
anything to the contrary contained herein, to the extent and in the manner
hereinafter set forth in this Article, the indebtedness represented by the
Securities and the payment of the principal of and interest on each and all of
the Securities are hereby expressly made subordinate and subject in right of
payment to the prior payment in full in cash or cash equivalents of all Senior
Indebtedness.
SECTION 1102. Payment Over of Proceeds upon Dissolution, etc.
In the event of (a) any insolvency or bankruptcy case or proceeding,
or any receivership, liquidation, reorganization or other similar case or
proceeding in connection therewith, relative to the Company or to its creditors,
as such, or to its assets, or (b) any liquidation, dissolution or other winding
up of the Company, whether voluntary or involuntary and whether or not involving
insolvency or bankruptcy, or (c) any assignment for the benefit of creditors or
any other marshaling of assets and liabilities of the Company, then and in any
such event:
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(1) the holders of Senior Indebtedness shall be entitled to receive
payment in full in cash or cash equivalents of all amounts due or to become
due on or in respect of all Senior Indebtedness, or provision shall be made
for such payment in cash or cash equivalents, before the Holders of the
Securities are entitled to receive any payment on account of principal of
or interest on the Securities; and
(2) any payment or distribution of assets of the Company of any kind
or character, whether in cash, property or securities, by set-off or
otherwise, to which the Holders or the Trustee would be entitled but for
the provisions of this Article Eleven, including any such payment or
distribution which may be payable or deliverable by reason of the payment
of any other indebtedness of the Company being subordinated to the payment
of the Securities (except, so long as the effect of this parenthetical
clause is not to cause the Securities to be treated in any case or
proceeding or similar event described in Subsection (a), (b) or (c) of this
Section 1102 as part of the same class of claims as the Senior Indebtedness
or any class of claims on a parity with or senior to the Senior
Indebtedness, for any such payment or distribution of securities which (i)
are unsecured, (ii) have an average life and final maturity no shorter than
the average life and final maturity of the Securities and (iii) are
subordinated, to at least the same extent as the Securities, to the payment
of all Senior Indebtedness then outstanding), shall be paid by the trustee
in bankruptcy, receiver, liquidating trustee, custodian, assignee or agent
or other person making such payment or distribution, whether a trustee in
bankruptcy, a receiver or liquidating trustee or otherwise, directly to the
holders of Senior Indebtedness or their Representative or Representatives
or to the trustee or trustees under any indenture under which any
instruments evidencing any of such Senior Indebtedness may have been
issued, ratably according to the aggregate amounts remaining unpaid on
account of the principal of, and premium, if any, and interest on, and
other amounts due on or in connection with, the Senior Indebtedness to the
extent necessary to make payment in full in cash or cash equivalents of all
Senior Indebtedness remaining unpaid, after giving effect to any concurrent
payment or distribution to the holders of such Senior Indebtedness; and
(3) in the event that, notwithstanding the foregoing provisions of
this Section, the Trustee or the Holder of any Security shall have received
any such payment or distribution of assets of the Company of any kind or
character, whether in cash, property or securities, including any such
payment or distribution which may be payable or deliverable by reason of
the payment of any other indebtedness of the Company being subordinated to
the payment of the Securities, before all Senior Indebtedness is paid in
full or payment thereof provided for, then and in such event such payment
or distribution shall be paid over or delivered forthwith to the trustee in
bankruptcy, receiver, liquidating trustee, custodian, assignee, agent
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or other Person making payment or distribution of assets of the Company for
application to the payment of all Senior Indebtedness remaining unpaid to
the extent necessary to pay all Senior Indebtedness in full in cash or cash
equivalents, after giving effect to any concurrent payment or distribution
to or for the holders of Senior Indebtedness.
The consolidation of the Company with, or the merger of the Company
into, another corporation, partnership or trust or the liquidation or
dissolution of the Company following the conveyance, transfer or lease of its
properties and assets substantially as an entirety to another corporation,
partnership or trust upon the terms and conditions set forth in Article Eight
shall not be deemed a dissolution, winding up, liquidation, reorganization,
assignment for the benefit of creditors or marshaling of assets and liabilities
of the Company for the purposes of this Section if the corporation, partnership
or trust formed by such consolidation or into which the Company is merged or the
corporation, partnership or trust which acquires by conveyance, transfer or
lease such properties and assets substantially as an entirety, as the case may
be, shall, as a part of such consolidation, merger, conveyance, transfer or
lease, comply with the conditions set forth in Article Eight.
SECTION 1103. Payment Permitted If No Default.
Nothing contained in this Article or elsewhere in this Indenture or in
any of the Securities shall prevent the Company, at any time except during the
pendency of any case, proceeding, dissolution, liquidation or other winding up,
assignment for the benefit of creditors or other marshaling of assets and
liabilities of the Company referred to in Section 1102, from making payments at
any time of principal of or interest on the Securities.
SECTION 1104. Subrogation to Rights of Holders of Senior Indebtedness.
Subject to the payment in full of all Senior Indebtedness, the Holders
of the Securities shall be subrogated (equally and ratably with the holders of
all indebtedness of the Company which by its express terms is subordinated to
Senior Indebtedness of the Company to the same extent as the Securities are
subordinated and which is entitled to like rights of subrogation) to the rights
of the holders of such Senior Indebtedness to receive payments and distributions
of cash, property and securities applicable to the Senior Indebtedness until the
principal of and interest on the Securities shall be paid in full. For purposes
of such subrogation, no payments or distributions to the holders of Senior
Indebtedness of any cash, property or securities to which the Holders of the
Securities or the Trustee would be entitled except for the provisions of this
Article, and no payments over pursuant to the provisions of this Article to the
holders of Senior Indebtedness by Holders of the Securities or the Trustee,
shall, as among the Company,
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its creditors other than holders of Senior Indebtedness, and the Holders of the
Securities, be deemed to be a payment or distribution by the Company to or on
account of the Senior Indebtedness.
SECTION 1105. Provisions Solely to Define Relative Rights.
The provisions of this Article are and are intended solely for the
purpose of defining the relative rights of the Holders of the Securities on the
one hand and the holders of Senior Indebtedness on the other hand. Nothing
contained in this Article or elsewhere in this Indenture or in the Securities is
intended to or shall (a) impair, as among the Company, its creditors other than
holders of Senior Indebtedness and the Holders of the Securities, the obligation
of the Company, which is absolute and unconditional, to pay to the Holders of
the Securities the principal of and interest on the Securities as and when the
same shall become due and payable in accordance with their terms; or (b) affect
the relative rights against the Company of the Holders of the Securities and
creditors of the Company other than the holders of Senior Indebtedness; or (c)
prevent the Trustee or the Holder of any Security from exercising all remedies
otherwise permitted by applicable law upon default under this Indenture, subject
to the express limitations set forth in Article Five and to the rights, if any,
under this Article of the holders of Senior Indebtedness in any case,
proceeding, dissolution, liquidation or other winding up, assignment for the
benefit of creditors or other marshaling of assets and liabilities of the
Company referred to in Section 1102, to receive, pursuant to and in accordance
with such Section, cash, property and securities otherwise payable or
deliverable to the Trustee or such Holder.
SECTION 1106. Trustee to Effectuate Subordination.
Each Holder of a Security by his acceptance thereof authorizes and
directs the Trustee on its behalf to take such action as may be necessary or
appropriate to effectuate the subordination provided in this Article and
appoints the Trustee its attorney-in-fact for any and all such purposes.
SECTION 1107. No Waiver of Subordination Provisions.
No right of any present or future holder of any Senior Indebtedness to
enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or by any act or failure to act, in good faith, by any such holder, or by any
non-compliance by the Company with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof any such holder may have or be
otherwise charged with.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Indebtedness may, at any time and from time to time,
without the
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consent of or notice to the Trustee or the Holders of the Securities, without
incurring responsibility to the Holders of the Securities and without impairing
or releasing the subordination provided in this Article or the obligations
hereunder of the Holders of the Securities to the holders of Senior
Indebtedness, do any one or more of the following: (a) change the manner, place
or terms of payment or extend the time of payment of, or renew or alter, Senior
Indebtedness or any instrument evidencing the same or any agreement under which
Senior Indebtedness is outstanding; (b) sell, exchange, release or otherwise
deal with any property pledged, mortgaged or otherwise securing Senior
Indebtedness; (c) release any Person liable in any manner for the collection of
Senior Indebtedness; and (d) exercise or refrain from exercising any rights
against the Company and any other Person.
SECTION 1108. Notice to Trustee.
The Company shall give prompt written notice to the Trustee of any
fact known to the Company which would prohibit the making of any payment to or
by the Trustee in respect of the Securities. Notwithstanding the provisions of
this Article or any other provision of this Indenture, the Trustee shall not be
charged with knowledge of the existence of any facts which would prohibit the
making of any payments to or by the Trustee in respect of the Securities, unless
and until the Trustee shall have received written notice thereof at the
Corporate Trust Office of the Trustee from the Company or a holder of Senior
Indebtedness or from any Representative therefor; and, prior to the receipt of
any such written notice, the Trustee, subject to the provisions of Section 602,
shall be entitled in all respects to assume that no such facts exist; provided,
--------
however, that if the Trustee shall have not have received the notice provided
- -------
for in this Section 1109 at least three Business Days prior to the date upon
which by the terms hereof any money may become payable for any purpose
(including, without limitation, the payment of the principal of or interest on
any Security), then, anything herein contained to the contrary notwithstanding,
the Trustee shall have full power and authority to receive such money and to
apply the same to the purpose for which such money was received and shall not be
affected by any notice to the contrary which may be received by it within three
Business Days prior to such date. Nothing in this Section 1108 shall limit the
right of the holders of Senior Indebtedness to recover payments as contemplated
by Section 1102.
Subject to the provisions of Section 601, the Trustee shall be
entitled to rely on the delivery to it of a written notice by a Person
representing himself to be a holder of Senior Indebtedness (or a Representative
therefor) to establish that such notice has been given by a holder of Senior
Indebtedness (or a Representative therefor). In the event that the Trustee
determines in good faith that further evidence is required with respect to the
right of any Person as a holder of Senior Indebtedness to participate in any
payment or distribution pursuant to this Article, the Trustee may request such
Person to furnish evidence to the reasonable satisfaction of the Trustee as to
the amount of Senior Indebtedness held by such Person, the extent to which such
Person is entitled to
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participate in such payment or distribution and any other facts pertinent to the
rights of such Person under this Article, and if such evidence is not furnished,
the Trustee may defer any payment to such Person pending judicial determination
as to the right of such Person to receive such payment.
SECTION 1109. Reliance on Judicial Order or Certificate of Liquidating Agent.
Upon any payment or distribution of assets of the Company referred to
in this Article, the Trustee, subject to the provisions of Section 601, and the
Holders of the Securities shall be entitled to rely upon any order or decree
entered by any court of competent jurisdiction in which such insolvency,
bankruptcy, receivership, liquidation, reorganization, dissolution, winding up
or similar case or proceeding is pending, or a certificate of the trustee in
bankruptcy, receiver, liquidating trustee, custodian, assignee for the benefit
of creditors, agent or other Person making such payment or distribution,
delivered to the Trustee or to the Holders of Securities, for the purpose of
ascertaining the Persons entitled to participate in such payment or
distribution, the holders of Senior Indebtedness and other indebtedness of the
Company, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article.
SECTION 1110. Rights of Trustee as a Holder of Senior Indebtedness;
Preservation of Trustee's Rights.
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article with respect to any Senior Indebtedness which
may at any time be held by it, to the same extent as any other holder of Senior
Indebtedness, and nothing in this Indenture shall deprive the Trustee of any of
its rights as such holder.
Nothing in this Article shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 607.
SECTION 1111. Article Applicable to Paying Agents.
In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting hereunder, the term "Trustee"
as used in this Article shall in such case (unless the context otherwise
requires) be construed as extending to and including such Paying Agent within
its meaning as fully for all intents and purposes as if such Paying Agent were
named in this Article in addition to or in place of the Trustee; provided,
--------
however, that (i) Section 1110 shall not apply to the Company or any Affiliate
- -------
of the Company if it or such Affiliate acts as Paying Agent and (ii) any notice
required by this Article Eleven to be given by the holders of, or a
Representative for, Senior Indebtedness need only be given to the Trustee and
not to any Paying Agent.
-58-
<PAGE>
ARTICLE TWELVE
Redemption of Securities
SECTION 1201. Optional Redemption; Conditions to Optional Redemption.
At any time on or after ____________, 2000, the Company shall have the
right, subject to the last sentence of this Section 1201, to redeem the
Securities, in whole or in part, from time to time, at a Redemption Price equal
to 100% of the principal amount of Securities to be redeemed plus accrued but
unpaid interest, including any Additional Interest, to the Redemption Date, with
the proceeds of one or more Equity Issuances; provided, however, that
-------- -------
installments of interest whose Stated Maturity is on or prior to the Redemption
Date shall be payable to the Holders of such Securities, or one or more
Predecessor Securities, registered as such at the close of business on the
relevant Record Dates according to their terms and the provisions of Section
307.
If a Tax Event shall occur and be continuing, the Company shall have
the right to redeem the Securities in whole but not in part, at a Redemption
Price equal to 100% of the principal amount thereof plus accrued but unpaid
interest, including any Additional Interest, to the Redemption Date; provided,
--------
however, that installments of interest whose Stated Maturity is on or prior to
- -------
the Redemption Date shall be payable to the Holders of such Securities, or one
or more Predecessor Securities, registered as such at the close of business on
the relevant Record Dates according to their terms and the provisions of Section
307.
For so long as Rouse Capital is the Holder of all Securities
Outstanding, the proceeds of any redemption described in this Section 1201 shall
be used by Rouse Capital to redeem Preferred Securities and Common Securities in
accordance with their terms. The Company shall not redeem the Securities in
part unless (a) all accrued and unpaid interest (including any Additional
Interest) has been paid in full on all Securities Outstanding for all quarterly
interest periods terminating on or prior to the Redemption Date and (b) no
Extension Period is in effect.
SECTION 1202. Applicability of Article.
Redemption of Securities at the election of the Company, as permitted
by Section 1201, shall be made in accordance with such provision and this
Article.
SECTION 1203. Election to Redeem; Notice to Trustee.
The election of the Company to redeem Securities pursuant to Section
1201 shall be evidenced by a Board Resolution. In case of any redemption at the
election of the Company of less than all the Securities, the Company shall, at
least 60 days prior to
-59-
<PAGE>
the Redemption Date fixed by the Company (unless a shorter time shall be
satisfactory to the Trustee), notify the Trustee of such Redemption Date and of
the principal amount of Securities to be redeemed and provide a copy of the
notice of redemption given to Holders of Securities to be redeemed pursuant to
Section 1204.
SECTION 1204. Selection by Trustee of Securities to Be Redeemed.
If less than all the Securities are to be redeemed (unless such
redemption affects only a single Security), the particular Securities to be
redeemed shall be selected not more than 60 days prior to the Redemption Date by
the Trustee, from the Outstanding Securities not previously called for
redemption, by such method (including pro rata or by lot) as the Trustee shall
deem fair and appropriate and which may provide for the selection for redemption
of portions (equal to $25 or any integral multiple thereof) of the principal
amount of the Securities.
The Trustee shall promptly notify the Company in writing of the
Securities selected for redemption as aforesaid and, in case of any Securities
selected for partial redemption as aforesaid, the principal amount thereof to be
redeemed.
The provisions of the two preceding paragraphs shall not apply with
respect to any redemption affecting only a single Security, whether such
Security is to be redeemed in whole or in part. In the case of any such
redemption in part, the unredeemed portion of the principal amount of the
Security shall be in an authorized denomination (which shall not be less than
the minimum authorized denomination) for such Security.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Securities redeemed or to be redeemed only in part, to the
portion of the principal amount of such Securities which has been or is to be
redeemed.
SECTION 1205. Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption
Date, to each Holder of Securities to be redeemed, at its address appearing in
the Security Register.
All notices of redemption shall identify the Securities to be redeemed
(including CUSIP number) and shall state:
(1) the Redemption Date,
(2) the Redemption Price,
-60-
<PAGE>
(3) that on the Redemption Date the Redemption Price will become due
and payable upon each such security to be redeemed and that interest
thereon will cease to accrue on and after said date, and
(4) the place or places where such securities are to be surrendered
for payment of the Redemption Price.
Notice of redemption of Securities to be redeemed at the election of
the Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.
SECTION 1206. Deposit of Redemption Price.
Prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 1003) an amount of
money sufficient to pay the Redemption Price of, and (except if the Redemption
Date shall be an Interest Payment Date) accrued interest on, all the Securities
which are to be redeemed on that date.
SECTION 1207. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities so
to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest. Upon surrender of any
such Security for redemption in accordance with said notice, such Security shall
be paid by the Company at the Redemption Price, together with accrued interest
to the Redemption Date; provided, however, that installments of interest whose
Stated Maturity is on or prior to the Redemption Date shall be payable to the
Holders of such Securities, or one or more Predecessor Securities, registered as
such at the close of business on the relevant Record Dates according to their
terms and the provisions of Section 307.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal shall, until paid, bear interest
from the Redemption Date at the rate borne by the Security, compounded
quarterly.
SECTION 1208. Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be surrendered
at a place of payment therefor (with, if the Company or the Trustee so requires,
due endorsement by, or a written instrument of transfer in form satisfactory to
the Company and the Trustee duly executed by, the Holder thereof or its attorney
duly authorized in
-61-
<PAGE>
writing), and the Company shall execute, and the Trustee shall authenticate and
deliver to the Holder of such Security without service charge, a new Security or
Securities, of any authorized denomination as requested by such Holder, in
aggregate principal amount equal to and in exchange for the unredeemed portion
of the principal of the Security so surrendered.
------------------------------------------
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.
THE ROUSE COMPANY
By:
---------------------------------------
Name:
Title:
Attest:
- -------------------------------
THE FIRST NATIONAL BANK OF CHICAGO, as Trustee
By:
---------------------------------------
Name:
Title:
Attest:
- -------------------------------
-62-
<PAGE>
EXHIBIT 4.6
DRAFT 11/16/95
GUARANTEE AGREEMENT
Between
The Rouse Company
(as Guarantor)
and
The First National Bank of Chicago
(as Trustee)
dated as of
______________, 1995
<PAGE>
CROSS-REFERENCE TABLE/*/
<TABLE>
<CAPTION>
Section of Section of
Trust Indenture Act Guarantee
of 1939, as amended Agreement
- ---------------------------- ----------------
<S> <C>
310(a)...................... 4.1(a)
310(b)...................... 4.1(c), 2.8
310(c)...................... Inapplicable
311(a)...................... 2.1(b), 2.2(b)
311(b)...................... 2.1(b), 2.2(b)
311(c)...................... Inapplicable
312(a)...................... 2.2(a)
312(b)...................... 2.2(b)
313......................... 2.3
314(a)...................... 2.4
314(b)...................... Inapplicable
314(c)...................... 2.5
314(d)...................... Inapplicable
314(e)...................... 1.1, 2.5, 3.2
314(f)...................... 2.1, 3.2
315(a)...................... 3.1(d)
315(b)...................... 2.7
315(c)...................... 3.1
315(d)...................... 3.1(d)
316(a)...................... 5.4(iii), 2.6
316(b)...................... 5.1
316(c)...................... 2.2
317(a)...................... Inapplicable
317(b)...................... Inapplicable
318(a)...................... 2.1(b)
318(b)...................... 2.1
318(c)...................... 2.1(a)
</TABLE>
/*/ This Cross-Reference Table does not constitute part of the Guarantee
Agreement and shall not affect the interpretation of any of its terms or
provisions.
<PAGE>
TABLE OF CONTENTS
ARTICLE I .................................................... 1
DEFINITIONS
SECTION 1.1. Definitions..................................... 1
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1. Trust Indenture Act; Application................ 4
SECTION 2.2. Lists of Holders of Securities.................. 4
SECTION 2.3. Reports by the Trustee.......................... 5
SECTION 2.4. Periodic Reports to Trustee..................... 5
SECTION 2.5. Evidence of Compliance with Conditions Precedent 5
SECTION 2.6. Event of Default; Notice........................ 5
SECTION 2.7. Conflicting Interests........................... 5
ARTICLE III
POWERS, DUTIES AND RIGHTS OF TRUSTEE
SECTION 3.1. Powers and Duties of the Trustee. .............. 6
SECTION 3.2. Certain Rights of Trustee. ..................... 7
ARTICLE IV
TRUSTEE
SECTION 4.1. Trustee; Eligibility. .......................... 9
SECTION 4.2. Appointment, Removal and Resignation of Trustee. 10
ARTICLE V
GUARANTEE
SECTION 5.1. Guarantee....................................... 11
SECTION 5.2. Waiver of Notice and Demand..................... 11
SECTION 5.3. Obligations Not Affected........................ 11
SECTION 5.4. Rights of Holders............................... 12
SECTION 5.5. Guarantee of Payment............................ 12
SECTION 5.6. Subrogation..................................... 12
SECTION 5.7. Independent Obligations......................... 13
<PAGE>
ARTICLE VI
SUBORDINATION
SECTION 6.1. Subordination................................... 13
ARTICLE VII
TERMINATION
SECTION 7.1. Termination..................................... 13
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1. Successors and Assigns.......................... 13
SECTION 8.2. Amendments...................................... 14
SECTION 8.3. Notices......................................... 14
SECTION 8.4. Benefit......................................... 15
SECTION 8.5. Interpretation.................................. 15
SECTION 8.6. Governing Law................................... 16
ii
<PAGE>
GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT ("Guarantee Agreement"), dated as of
_________, 1995, is executed and delivered by The Rouse Company, a Maryland
corporation (the "Guarantor"), and The First National Bank of Chicago, as
trustee (the "Trustee"), for the benefit of the Holders (as defined herein) from
time to time of the Preferred Securities (as defined herein) of Rouse Capital, a
Delaware statutory business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Trust Agreement (as
amended or supplemented from time to time in accordance with its terms, the
"Trust Agreement"), dated as of __________, 1995, among the Trustees of the
Issuer named therein, The Rouse Company, as Depositor, and the Holders from time
to time of undivided beneficial interests in the assets of the Issuer, the
Issuer is issuing as of the date hereof $____________ aggregate liquidation
amount of its ___% Cumulative Quarterly Income Preferred Securities, including
up to $________ aggregate liquidation amount of Preferred Securities subject to
an over-allotment option (the "Preferred Securities") representing undivided
beneficial interests in the assets of the Issuer and having the terms set forth
in the Trust Agreement;
WHEREAS, the Preferred Securities will be issued by the Issuer and the
proceeds thereof will be used to purchase the Debentures (as defined in the
Trust Agreement) of the Guarantor which will be deposited with the Issuer as
trust assets; and
WHEREAS, as incentive for the Holders to purchase the Preferred
Securities, the Guarantor desires to irrevocably and unconditionally agree, to
the extent set forth herein, to pay to the Holders of the Preferred Securities
the Guarantee Payments (as defined herein) and to make certain other payments on
the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the payment for Preferred
Securities by each Holder thereof, which payment the Guarantor hereby agrees
shall benefit the Guarantor, the Guarantor executes and delivers this Guarantee
Agreement for the benefit of the Holders from time to time of the Preferred
Securities.
ARTICLE I
---------
DEFINITIONS
-----------
SECTION 1.1. Definitions.
-----------
As used in this Guarantee Agreement, the terms set forth below
shall, unless the context otherwise requires, have the following meanings.
Capitalized or otherwise defined terms used but not otherwise defined herein
<PAGE>
shall have the meanings assigned to such terms in the Trust Agreement as in
effect on the date hereof.
"Affiliate" of any specified Person (as defined herein) means any
other Person directly or indirectly controlling or controlled by or under
direct or indirect common control with such specified Person. For the
purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of
voting securities, by contract or otherwise; and the terms "controlling"
and "controlled" have meanings correlative to the foregoing.
"Common Securities" means the securities representing common undivided
beneficial interests in the assets of the Issuer.
"corporation" means a corporation, association, company, including
without limitation, a limited liability company, joint-stock company or
business trust.
"Event of Default" means a default by the Guarantor on any of its
payment obligations under this Guarantee Agreement.
"Guarantee Payments" shall mean the following payments or
distributions, without duplication, with respect to the Preferred
Securities, to the extent not paid or made by or on behalf of the Issuer:
(i) any accrued and unpaid Distributions that are required to be paid on
such Preferred Securities, but if and only to the extent the Property
Trustee of the Issuer has available in the Payment Account funds sufficient
to make such payment, (ii) the redemption price, including all accrued and
unpaid Distributions to the date of redemption (the "Redemption Price"),
with respect to the Preferred Securities called for redemption by the
Issuer, but if and only to the extent that the Property Trustee of the
Issuer has available in the Payment Account funds sufficient to make such
payment, and (iii) upon a voluntary or involuntary dissolution, winding-up
or termination of the Issuer (other than in connection with a redemption of
all of the Preferred Securities), the lesser of (a) the aggregate of the
liquidation amount and all accrued and unpaid Distributions on the
Preferred Securities to the date of payment, but if and only to the extent
the Issuer has funds sufficient to make such payment, and (b) the amount of
assets of the Issuer remaining available for distribution to Holders in
liquidation of the Issuer (in either case, the "Liquidation Distribution").
"Guarantor" means The Rouse Company and its successors, assigns,
receivers, trustees and representatives as provided in Article VIII
hereunder.
"Holder" shall mean any holder, as registered on the books and records
of the Issuer, of any Preferred Securities; provided, however, that in
determining
2
<PAGE>
whether the holders of the requisite percentage of Preferred Securities
have given any request, notice, consent or waiver hereunder, "Holder" shall
not include the Guarantor or any Affiliate of the Guarantor.
"Indenture" means the Indenture dated as of ____________, 1995,
between the Guarantor (the "Debenture Issuer") and The First National Bank
of Chicago, as trustee, as amended and supplemented from time to time in
accordance with its terms.
"Majority in liquidation amount of the Preferred Securities" means a
vote by Holder(s) of Preferred Securities, of at least a majority in
liquidation amount of all outstanding Preferred Securities.
"Officers' Certificate" means a certificate signed by (i) the
Chairman, a Vice Chairman, the Chief Executive Officer, the President, a
Vice President or the Treasurer of the Guarantor and (ii) the Secretary or
an Assistant Secretary of the Guarantor, and delivered to the Trustee;
provided, however, that such certificate may be signed by two of the
-------- -------
officers or directors listed in clause (i) above in lieu of being signed by
one of such officers or directors listed in such clause (i) and one of the
officers listed in clause (ii) above. Any Officers' Certificate delivered
with respect to compliance with a condition or covenant provided for in
this Guarantee Agreement shall include:
(a) a statement that each officer or director signing the
Officers' Certificate has read the covenant or condition and the
definitions relating thereto;
(b) a brief statement of the nature and scope of the examination
or investigation undertaken by each officer or director in rendering
the Officers' Certificate;
(c) a statement that each such officer or director has made such
examination or investigation as, in such officer's or director's
opinion, is necessary to enable such officer or director to express an
informed opinion as to whether or not such covenant or condition has
been complied with; and
(d) a statement as to whether, in the opinion of each such
officer or director, such condition or covenant has been complied
with.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, trust, unincorporated organization or
government or any agency or political subdivision thereof.
3
<PAGE>
"Responsible Officer" means, with respect to the Trustee, any vice-
president, any assistant vice-president, the secretary, any assistant
secretary, the treasurer, any assistant treasurer, any trust officer or
assistant trust officer or any other officer of the Corporate Trust
Department of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means, with
respect to a particular corporate trust matter, any other officer to whom
such matter is referred because of that officer's knowledge of and
familiarity with the particular subject.
"Successor Trustee" means a successor Trustee possessing the
qualifications to act as Trustee under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in
force at the date as of which this instrument was executed; provided,
--------
however, that in the event the Trust Indenture Act of 1939 is amended after
-------
such date, "Trust Indenture Act" means, to the extent required by any such
amendment, the Trust Indenture Act of 1939, as so amended.
"Trustee" means The First National Bank of Chicago until a Successor
Trustee has been appointed and has accepted such appointment pursuant to
the terms of this Guarantee Agreement and thereafter means each such
Successor Trustee.
ARTICLE II
----------
TRUST INDENTURE ACT
-------------------
SECTION 2.1. Trust Indenture Act; Application.
--------------------------------
(a) This Guarantee Agreement is subject to the provisions of the Trust
Indenture Act that are required to be part of this Guarantee Agreement and
shall, to the extent applicable, be governed by such provisions; and
(b) if and to the extent that any provision of this Guarantee
Agreement limits, qualifies or conflicts with the duties imposed by Sections 310
to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.
SECTION 2.2. Lists of Holders of Securities.
------------------------------
(a) The Guarantor shall furnish or cause to be furnished to the
Trustee (a) semiannually, not later than February 15 and August 15 in each year,
a list, in such form as the Trustee may reasonably require, of the names and
addresses of the Holders of the Preferred Securities ("List of Holders") as of a
date not more than 15 days prior to the
4
<PAGE>
delivery thereof, and (b) at such other times as the Trustee may reasonably
request in writing, within 30 days after the receipt by the Guarantor of any
such request, a List of Holders as of a date not more than 15 days prior to the
time such list is furnished; provided that the Guarantor shall not be obligated
to provide such List of Holders at any time the List of Holders does not differ
from the most recent List of Holders given to the Trustee by the Guarantor. The
Trustee may destroy any List of Holders previously given to it on receipt of a
new List of Holders.
(b) The Trustee shall comply with its obligations under Sections
311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3. Reports by the Trustee.
----------------------
Within 60 days after July 1 of each year, the Trustee shall provide
to the Holders of the Preferred Securities such reports as are required by
Section 313 of the Trust Indenture Act, if any, in the form and in the manner
provided by Section 313 of the Trust Indenture Act. The Trustee shall also
comply with the requirements of Section 313(d) of the Trust Indenture Act.
SECTION 2.4. Periodic Reports to Trustee.
---------------------------
The Guarantor shall provide to the Trustee such documents, reports
and information as are required by Section 314 (if any) and the compliance
certificate required by Section 314 of the Trust Indenture Act in the form, in
the manner and at the times required by Section 314 of the Trust Indenture Act.
SECTION 2.5. Evidence of Compliance with Conditions Precedent.
------------------------------------------------
The Guarantor shall provide to the Trustee such evidence of
compliance with any conditions precedent provided for in this Guarantee
Agreement that relate to any of the matters set forth in Section 314(c) of the
Trust Indenture Act. Any certificate or opinion required to be given by an
officer pursuant to Section 314(c)(1) may be given in the form of an Officers'
Certificate.
SECTION 2.6. Event of Default; Notice.
------------------------
The Trustee shall, within 90 days after the occurrence of an Event
of Default, transmit by mail, first class postage prepaid, to the Holders of the
Preferred Securities, notices of all Events of Default known to the Trustee,
unless such defaults have been cured before the giving of such notice, provided
that the Trustee shall be protected in withholding such notice if and so long as
the board of directors, the executive committee, or a trust committee of
directors and/or Responsible Officers of the Trustee in good faith determines
that the withholding of such notice is in the interests of the Holders of the
Preferred Securities.
SECTION 2.7. Conflicting Interests.
---------------------
The Trust Agreement shall be deemed to be specifically described in
this Guarantee Agreement for the purposes of clause (i) of the first proviso
contained in Section 310(b) of the Trust Indenture Act.
5
<PAGE>
ARTICLE III
-----------
POWERS, DUTIES AND RIGHTS OF TRUSTEE
------------------------------------
SECTION 3.1. Powers and Duties of the Trustee.
--------------------------------
(a) This Guarantee Agreement shall be held by the Trustee for the
benefit of the Holders of the Preferred Securities, and the Trustee shall not
transfer this Guarantee Agreement to any Person except a Holder of Preferred
Securities exercising his or her rights pursuant to Section 5.4(iv) or to a
Successor Trustee on acceptance by such Successor Trustee of its appointment to
act as Successor Trustee. The right, title and interest of the Trustee shall
automatically vest in any Successor Trustee, and such vesting and cessation of
title shall be effective whether or not conveyancing documents have been
executed and delivered pursuant to the appointment of such Successor Trustee.
(b) If an Event of Default has occurred and is continuing, the Trustee
shall enforce this Guarantee Agreement for the benefit of the Holders of the
Preferred Securities.
(c) The Trustee, before the occurrence of any Event of Default and
after the curing of all Events of Default that may have occurred, shall
undertake to perform only such duties as are specifically set forth in this
Guarantee Agreement, and no implied covenants against the Trustee shall be read
into this Guarantee Agreement. In case an Event of Default has occurred, the
Trustee shall exercise such of the rights and powers vested in it by this
Guarantee Agreement, and use the same degree of care and skill in its exercise
thereof, as a prudent person would exercise or use under the circumstances in
the conduct of his or her own affairs.
(d) No provision of this Guarantee Agreement shall be construed to
relieve the Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(i) prior to the occurrence of any Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Trustee shall be
determined solely by the express provisions of this Guarantee
Agreement, and the Trustee shall not be liable except for the
performance of such duties and obligations as are specifically set
forth in this Guarantee Agreement; and
6
<PAGE>
(B) in the absence of bad faith on the part of the Trustee,
the Trustee may conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Trustee and conforming to
the requirements of this Guarantee Agreement; but in the case of any
such certificates or opinions that by any provision hereof are
specifically required to be furnished to the Trustee, the Trustee
shall be under a duty to examine the same to determine whether or not
they conform to the requirements of this Guarantee Agreement;
(ii) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer of the Trustee, unless it shall
be proved that the Trustee was negligent in ascertaining the pertinent
facts upon which such judgment was made;
(iii) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders of a Majority in liquidation amount of the
Preferred Securities relating to the time, method and place of conducting
any proceeding for any remedy available to the Trustee, or exercising any
trust or power conferred upon the Trustee under this Guarantee Agreement;
and
(iv) no provision of this Guarantee Agreement shall require the
Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the
exercise of any of its rights or powers, if the Trustee shall have
reasonable grounds for believing that the repayment of such funds or
liability is not reasonably assured to it under the terms of this Guarantee
Agreement or adequate indemnity against such risk or liability is not
reasonably assured to it.
SECTION 3.2. Certain Rights of Trustee.
-------------------------
(a) Subject to the provisions of Section 3.1:
(i) the Trustee may rely and shall be fully protected in acting
or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed, sent or
presented by the proper party or parties;
7
<PAGE>
(ii) any direction or act of the Guarantor contemplated by this
Guarantee Agreement shall be sufficiently evidenced by an Officers'
Certificate;
(iii) whenever, in the administration of this Guarantee
Agreement, the Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting any action hereunder, the
Trustee (unless other evidence is herein specifically prescribed) may, in
the absence of bad faith on its part, request and rely upon an Officers'
Certificate which, upon receipt of such request, shall be promptly
delivered by the Guarantor;
(iv) the Trustee may consult with counsel of its choice, and the
written advice or opinion of such counsel with respect to legal matters
shall be full and complete authorization and protection in respect of any
action taken, suffered or omitted by it hereunder in good faith and in
accordance with such advice or opinion; such counsel may be counsel to the
Guarantor or any of its Affiliates and may include any of its employees;
and the Trustee shall have the right at any time to seek instructions
concerning the administration of this Guarantee Agreement from any court of
competent jurisdiction;
(v) the Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Guarantee Agreement at the
request or direction of any Holder, unless such Holder shall have provided
to the Trustee such adequate security and indemnity as would satisfy a
reasonable person in the position of the Trustee, against the costs,
expenses (including attorneys' fees and expenses) and liabilities that
might be incurred by it in complying with such request or direction,
including such reasonable advances as may be requested by the Trustee;
provided that nothing contained in this Section 3.2(a)(v) shall be taken to
relieve the Trustee, upon the occurrence of an Event of Default, of its
obligation to exercise the rights and powers vested in it by this Guarantee
Agreement;
(vi) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further inquiry
or investigation into such facts or matters as it may see fit;
8
<PAGE>
(vii) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys, and the Trustee shall not be responsible for any
misconduct or negligence on the part of any agent or attorney appointed
with due care by it hereunder; and
(viii) whenever in the administration of this Guarantee
Agreement the Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action
hereunder, the Trustee (i) may request instructions from the Holders of the
Preferred Securities, (ii) may refrain from enforcing such remedy or right
or taking such other action until such instructions are received, and (iii)
shall be protected in acting in accordance with such instructions.
(b) No provision of this Guarantee Agreement shall be deemed to impose
any duty or obligation on the Trustee to perform any act or acts or exercise any
right, power, duty or obligation conferred or imposed on it in any jurisdiction
in which it shall be illegal, or in which the Trustee shall be unqualified or
incompetent in accordance with applicable law, to perform any such act or acts
or to exercise any such right, power, duty or obligation. No permissive power
or authority available to the Trustee shall be construed to be a duty.
ARTICLE IV
----------
TRUSTEE
-------
SECTION 4.1. Trustee; Eligibility.
--------------------
(a) There shall at all times be a Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the laws
of the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or Person permitted by the
Securities and Exchange Commission to act as an institutional trustee under
the Trust Indenture Act, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least 50 million
U.S. dollars ($50,000,000), and subject to supervision or examination by
Federal, State, Territorial or District of Columbia authority. If such
corporation publishes reports of condition at least annually, pursuant to
law or to the requirements of the supervising or examining authority
referred to
9
<PAGE>
above, then, for the purposes of this Section 4.1(a)(ii), the combined
capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published.
(b) If at any time the Trustee shall cease to be eligible to so act
under Section 4.1(a), the Trustee shall immediately resign in the manner and
with the effect set out in Section 4.2(d).
(c) The Trustee and the Guarantor shall in all respects comply with
the provisions of Section 310(b) of the Trust Indenture Act.
SECTION 4.2. Appointment, Removal and Resignation of Trustee.
-----------------------------------------------
(a) Subject to Section 4.2(c), the Trustee may be appointed or removed
without cause at any time by the Guarantor.
(b) Subject to Section 4.2(c), the Trustee may be removed at any time
by Act of the Holders of a Majority in liquidation amount of the Preferred
Securities, delivered to the Trustee and to the Guarantor.
(c) The Trustee shall not be removed until a Successor Trustee has
been appointed and has accepted such appointment by written instrument executed
by such Successor Trustee and delivered to the Guarantor.
(d) The Trustee appointed to office shall hold office until a
Successor Trustee shall have been appointed or until its removal or
registration. The Trustee may resign from office (without need for prior or
subsequent accounting) by an instrument in writing executed by the Trustee and
delivered to the Guarantor, which resignation shall not take effect until a
Successor Trustee has been appointed and has accepted such appointment by
instrument in writing executed by such Successor Trustee and delivered to the
Guarantor and the resigning Trustee.
(e) If no Successor Trustee shall have been appointed and accepted
appointment as provided in this Section 4.2 within 60 days after delivery to the
Guarantor of an instrument of resignation, the resigning Trustee may petition
any court of competent jurisdiction for appointment of a Successor Trustee.
Such court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Trustee.
10
<PAGE>
ARTICLE V
---------
GUARANTEE
---------
SECTION 5.1. Guarantee.
---------
The Guarantor irrevocably and unconditionally agrees to pay in full
to the Holders the Guarantee Payments (without duplication of amounts
theretofore paid by the Issuer), as and when due, regardless of any defense,
right of set-off or counterclaim which the Issuer may have or assert, other than
the defense of payment. The Guarantor's obligation to make a Guarantee Payment
may be satisfied, in the Guarantor's sole discretion, by direct payment of the
required amounts by the Guarantor to the Holders or by causing the Issuer to pay
such amounts to the Holders.
SECTION 5.2. Waiver of Notice and Demand.
---------------------------
The Guarantor hereby waives notice of acceptance of this Guarantee
Agreement and of any liability to which it applies or may apply, presentment,
demand for payment, any right to require a proceeding first against the Issuer
or any other Person before proceeding against the Guarantor, protest, notice of
nonpayment, notice of dishonor, notice of redemption and all other notices and
demands.
SECTION 5.3. Obligations Not Affected.
------------------------
The obligation of the Guarantor to make the Guarantee Payments
under this Guarantee Agreement shall in no way be affected or impaired by reason
of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied
agreement, covenant, term or condition relating to the Preferred Securities
to be performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or any
portion of the Distributions, Redemption Price, Liquidation Distribution or
any other sums payable under the terms of the Preferred Securities or the
extension of time for the performance of any other obligation under,
arising out of, or in connection with, the Preferred Securities (other than
an extension of time for payment of Distributions that results from the
extension of any interest payment period on the Debentures permitted by the
Indenture);
(c) any failure, omission, delay or lack of diligence on the part of
the Holders to enforce, assert or exercise any right, privilege, power or
remedy conferred on the Holders pursuant to the terms of the Preferred
Securities, or any action on the part of the Issuer granting indulgence or
extension of any kind;
11
<PAGE>
(d) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition or
readjustment of debt of, or other similar proceedings affecting, the Issuer
or any of the assets of the Issuer;
(e) any invalidity of, or defect or deficiency in, the Preferred
Securities;
(f) the settlement or compromise of any obligation guaranteed hereby
or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise constitute
a legal or equitable discharge or defense of a guarantor other than the
defense of payment, it being the intent of this Section 5.3 that the
obligations of the Guarantor hereunder shall be absolute and unconditional
under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or
obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 5.4. Rights of Holders.
-----------------
The Guarantor expressly acknowledges that: (i) this Guarantee
Agreement will be deposited with the Trustee to be held for the benefit of the
Holders of the Preferred Securities; (ii) the Trustee has the right to enforce
this Guarantee Agreement on behalf of the Holders of the Preferred Securities;
(iii) the Holders of a Majority in liquidation amount of the Preferred
Securities have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee in respect of this Guarantee
Agreement or exercising any trust or power conferred upon the Trustee under this
Guarantee Agreement; and (iv) any Holder of the Preferred Securities may
institute a legal proceeding directly against the Guarantor to enforce its
rights under this Guarantee Agreement, without first instituting a legal
proceeding against the Issuer or any other person or entity.
SECTION 5.5. Guarantee of Payment.
--------------------
This Guarantee Agreement creates a guarantee of payment and not of
collection. This Guarantee Agreement will not be discharged except by payment
of the Guarantee Payments in full (without duplication).
SECTION 5.6. Subrogation.
-----------
The Guarantor shall be subrogated to any and all rights of the
Holders of Preferred Securities against the Issuer in respect of any amounts
paid to the Holders by the Guarantor under this Guarantee Agreement; provided,
however, that the Guarantor shall not be entitled to enforce or exercise any
rights which it may acquire by way of subrogation or any indemnity,
reimbursement or other agreement, in all cases as a result of payment under this
Guarantee Agreement unless and until all of the Preferred Securities are paid in
full and are no longer outstanding. If any amount shall be paid to the
Guarantor in violation of the preceding sentence, the Guarantor agrees to hold
such amount in trust for the Holders and to pay over such amount to the Holders.
12
<PAGE>
SECTION 5.7. Independent Obligations.
-----------------------
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Preferred
Securities and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Guarantee
Agreement notwithstanding the occurrence of any event referred to in subsections
(a) through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI
----------
SUBORDINATION
-------------
SECTION 6.1. Subordination.
-------------
This Guarantee Agreement will constitute an unsecured obligation of
the Guarantor and will rank (i) subordinate and junior in right of payment to
all liabilities of the Guarantor (including the Debentures but excluding
liabilities that may be made pari passu with or subordinate to the Guarantee
---- -----
Payments expressly by their terms) and (ii) senior to the Guarantor's Series A
Convertible Preferred Stock, liquidation value $50.00 per share, and the
Guarantor's common stock.
ARTICLE VII
-----------
TERMINATION
-----------
SECTION 7.1. Termination.
-----------
This Guarantee Agreement shall terminate and be of no further force
and effect upon: (i) full payment of the Redemption Price of all Preferred
Securities, (ii) the distribution of Debentures to Holders of Preferred
Securities in accordance with the Trust Agreement in liquidation of the Issuer
or (iii) upon full payment of the amounts payable in accordance with the Trust
Agreement upon liquidation of the Issuer. Notwithstanding the foregoing, this
Guarantee Agreement will continue to be effective or will be reinstated, as the
case may be, if at any time any Holder must restore payment of any sums paid
with respect to Preferred Securities or under this Guarantee Agreement.
ARTICLE VIII
------------
MISCELLANEOUS
-------------
SECTION 8.1. Successors and Assigns.
----------------------
All guarantees and agreements contained in this Guarantee Agreement
shall bind the successors, assigns, receivers, trustees and representatives of
the Guarantor and shall inure to the benefit of the Holders of the Preferred
Securities then outstanding. Except in connection with a
13
<PAGE>
consolidation, merger or sale involving the Guarantor that is permitted under
Article Eight of the Indenture, the Guarantor shall not assign its obligations
hereunder.
SECTION 8.2. Amendments.
----------
Except with respect to any changes which do not adversely affect
the rights of Holders (in which case no consent of Holders will be required),
this Guarantee Agreement may only be amended with the prior approval of the
Holders of not less than a Majority in liquidation amount of the Preferred
Securities. The provisions of Article Six of the Trust Agreement concerning
meetings of Holders shall apply to the giving of such approval.
SECTION 8.3. Notices.
-------
Any notice, request or other communication required or permitted to
be given hereunder shall be in writing, duly signed by the party giving such
notice, and delivered, telecopied or mailed by first class mail as follows:
(a) if given to the Guarantor, to the address set forth below or such
other address as the Guarantor may give notice of to the Holders of the
Preferred Securities:
The Rouse Company
10275 Little Patuxent Parkway
Columbia, Maryland 21044-3406
Attention: Chief Financial Officer, with
a copy to the General Counsel
(b) if given to the Issuer, in care of the Trustee, at the Issuer's
(and the Trustee's) address set forth below or such other address as the
Trustee on behalf of the Issuer may give notice of to the Holders of the
Preferred Securities:
Rouse Capital
c/o The Rouse Company
10275 Little Patuxent Parkway
Columbia, Maryland 21044-3406
Attention: Chief Financial Officer, with
a copy to the General Counsel
with a copy to:
The First National Bank of Chicago
One First National Plaza
Mail Suite 0126
Chicago, IL 60670-0126
Facsimile No.: (312) 407-2088
Attention: Corporate Trust Services Division
14
<PAGE>
(c) if given to any Holder of Preferred Securities, at the address
set forth on the books and records of the Issuer.
All notices hereunder shall be deemed to have been given when received
in person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid, except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered on
the date of such refusal or inability to deliver.
SECTION 8.4. Benefit.
-------
This Guarantee Agreement is solely for the benefit of the Holders
of the Preferred Securities and, subject to Section 3.1(a), is not separately
transferable from the Preferred Securities.
SECTION 8.5. Interpretation.
--------------
In this Guarantee Agreement, unless the context otherwise requires:
(a) Capitalized terms used in this Guarantee Agreement but not defined
in the preamble hereto have the respective meanings assigned to them in
Section 1.1;
(b) a term defined anywhere in this Guarantee Agreement has the same
meaning throughout;
(c) all references to "the Guarantee Agreement" or "this Guarantee
Agreement" are to this Guarantee Agreement as modified, supplemented or
amended from time to time;
(d) all references in this Guarantee Agreement to Articles and
Sections are to Articles and Sections of this Guarantee Agreement unless
otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Guarantee Agreement unless otherwise defined in this
Guarantee Agreement or unless the context otherwise requires;
(f) a reference to the singular includes the plural and vice versa;
and
(g) the masculine, feminine or neuter genders used herein shall
include the masculine, feminine and neuter genders.
15
<PAGE>
SECTION 8.6. Governing Law.
-------------
THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
THIS GUARANTEE AGREEMENT is executed as of the day and year first
above written.
THE ROUSE COMPANY, as Guarantor
By:
-----------------------------------------
Name:
Title:
THE FIRST NATIONAL BANK OF CHICAGO,
as Trustee
By:
-----------------------------------------
Name:
Title:
16
<PAGE>
EXHIBIT 5.1
November 20, 1995
Rouse Capital
c/o The Rouse Company
10275 Little Patuxent Parkway
Columbia, Maryland 21044-3456
Re: Rouse Capital
-------------
Ladies and Gentlemen:
We have acted as special Delaware counsel for The Rouse Company, a
Maryland corporation ("Rouse"),and Rouse Capital, a Delaware business trust (the
"Trust"), in connection with the matters set forth herein. At your request, this
opinion is being furnished to you.
For purposes of giving the opinions hereinafter set forth, our
examination of documents has been limited to the examination of originals or
copies of the following:
(a) The Certificate of Trust of the Trust, dated September 29, 1995
(the "Certificate"), as filed in the office of the Secretary of State of the
State of Delaware (the "Secretary of State") on September 29, 1995;
(b) The Trust Agreement of the Trust, dated as of September 29, 1995,
between Rouse and the trustees of the Trust named therein;
(c) The preliminary prospectus, dated November 15, 1995 (the
"Prospectus"), relating to the __% Cumulative Quarterly Income Preferred
Securities of the Trust representing preferred undivided beneficial interests in
the assets of the Trust (each, a "Preferred Security" and collectively, the
"Preferred Securities");
<PAGE>
Rouse Capital
November 20, 1995
Page 2
(d) Amendment No. 3 to the Registration Statement (the "Registration
Statement") on Form S-3, including a form of Amended and Restated Trust
Agreement of the Trust, to be entered into among Rouse, the trustees of the
Trust named therein and the holders, from time to time, of the undivided
beneficial interests in the assets of the Trust (the "Trust Agreement"), as
proposed to be filed by Rouse and the Trust with the Securities and Exchange
Commission on or about November 20, 1995; and
(e) A Certificate of Good Standing for the Trust, dated November 20,
1995, obtained from the Secretary of State.
Initially capitalized terms used herein and not otherwise defined are
used as defined in the Trust Agreement.
For purposes of this opinion, we have not reviewed any documents other
than the documents listed in paragraph (a) through (e) above. In particular, we
have not reviewed any document (other than the documents listed in paragraphs
(a) through (e) above) that is referred to in or incorporated by reference into
the documents reviewed by us. We have assumed that there exists no provison in
any document that we have not reviewed that is inconsistent with the opinions
stated herein. We have conducted no independent factual investigation of our own
but rather have relied solely upon the foregoing documents, the statements and
information set forth therein and the additional matters recited or assumed
herein, all of which we have assumed to be true, complete and accurate in all
material respects.
With respect to all documents examined by us, we have assumed (i) the
authenticity of all documents submitted to us as authentic originals, (ii) the
conformity with the originals of all documents submitted to us as copies or
forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed (i) the Trust Agreement
and the Certificate are in full force and effect and have not been amended, (ii)
except to the extent provided in paragraph 1 below, the due organization or due
formation, as the case may be, and valid existence in good standing of each
party to the documents examined by us under the laws of the jurisdiction
governing its organization or formation, (iii) the legal capacity of natural
persons who are parties to the documents examined by us, (iv) the power and
authority of each of the parties to the documents examined by us to execute and
deliver, and to perform its obligations under, such documents, (v) the due
authorization, execution and delivery by all parties thereto of all documents
examined by us, (vi) the receipt by each Person to whom a Preferred Security is
to be issued by the Trust (collectively, the "Preferred Security Holders") of
<PAGE>
Rouse Capital
November 20, 1995
Page 3
a Preferred Securities Certificate for such Preferred Security and the payment
for the Preferred Security acquired by it, in accordance with the Trust
Agreement, the Registration Statement and the Prospectus, and (vii) the issuance
and sale of the Preferred Securities to the Preferred Security Holders in
accordance with the Trust Agreement, the Registration Statement and the
Prospectus. We have not participated in the preparation of the Registration
Statement or the Prospectus and assume no responsibility for their contents.
This opinion is limited to the laws of the State of Delaware (excluding
the securities laws of the State of Delaware), and we have not considered and
express no opinion on the laws of any other jurisdiction, including federal laws
and rules and regulations relating thereto. Our opinions are rendered only with
respect to Delaware laws and rules, regulations and orders thereunder which are
currently in effect.
Based upon the foregoing, and upon our examination of such questions of
law and statutes of the State of Delaware as we have considered necessary or
appropriate, and subject to the assumptions, qualifications, limitations and
exceptions set forth herein, we are of the opinion that:
1. The Trust has been duly created and is validly existing in good
standing as a business trust under the Delaware Business Trust Act, 12 Del. C.
-------
(S) 3801, et seq.
------
2. The Preferred Securities will represent valid and, subject to the
qualifications set forth in paragraph 3 below, fully paid and nonassessable
undivided beneficial interests in the assets of the Trust.
3. The Preferred Security Holders, as beneficial owners of the Trust,
will be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware. We note that the Preferred Security
Holders may be obligated, pursuant to the Trust Agreement, to (i) provide
indemnity and/or security in connection with and pay a sum sufficient to cover
any taxes or governmental charges arising from transfers or exchanges of
Preferred Securities Certificates and the issuance of replacement Preferred
Securities Certificates and (ii) provide security and/or indemnity in connection
with requests of or directions to the Property Trustee to exercise its rights
and powers under the Trust Agreement.
<PAGE>
Rouse Capital
November 20, 1995
Page 4
We consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Registration Statement. We hereby
consent to the use of our name under the heading "Validity of the Securities" in
the Prospectus. In giving the foregoing consents, we do not thereby admit that
we come within the category of Persons whose consent is required under Section 7
of the Securities Act of 1933, as amended, or the rules and regulations of the
Securities and Exchange Commission thereunder. Except as stated above, without
our prior written consent, this opinion may not be furnished or quoted to, or
relied upon by, any other Person for any purpose.
Very truly yours,
/s/ Richards, Layton & Finger
CDK/WAY/mag
<PAGE>
EXHIBIT 5.2
212-859-8000
November 20, 1995 (FAX: 212-859-4000)
The Rouse Company
10275 Little Patuxent Parkway
Columbia, Maryland 21044-3456
Rouse Capital
c/o The Rouse Company
10275 Little Patuxent Parkway
Columbia, Maryland 21044-3456
Ladies and Gentlemen:
We are acting as special counsel to The Rouse Company, a Maryland
corporation (the "Company"), and Rouse Capital, a Delaware statutory business
trust, in connection with the preparation of a Registration Statement on Form
S-3 (File Nos. 33-63279 and 33-63279-01) under the Securities Act of 1933, as
amended (the "Securities Act") (together with any amendments thereto, and any
registration statement that may be filed pursuant to Rule 462(b) promulgated
under the Securities Act, the "Registration Statement") with respect to (i) the
Guarantee (the "Guarantee") to be issued by the Company to The First National
Bank of Chicago, as trustee for the benefit of the holders of the __% Cumulative
Quarterly Income Preferred Securities of Rouse Capital, and registered under the
Registration Statement (the "Guarantee"), and (ii) the Company's __% Junior
Subordinated Debentures due 2025 registered under the Registration Statement
(the "Junior Subordinated Debentures"). The Junior Subordinated Debentures are
to be issued to Rouse Capital under an Indenture (the "Indenture") between the
Company and The First National Bank of Chicago, as trustee (the "Trustee").
We have examined the originals, or certified, conformed or
reproduction copies, of all such records, agreements, instruments and documents
as we have deemed relevant or necessary as the basis for the opinion hereinafter
expressed. In all such examinations, we have assumed the genuineness of all
signatures and the conformity to original or certified copies of all copies
submitted to us as conformed or reproduction copies. As to various questions of
fact relevant
<PAGE>
-2-
The Rouse Company November 20, 1995
to such opinion, we have relied upon, and assumed the accuracy of, certificates
and oral or written statements and other information of or from public
officials, officers or representatives of the Company and others.
Based upon the foregoing and subject to the limitations set forth
herein, we are of the opinion that:
1. The Guarantee has been duly authorized by the Company and when
executed and delivered by the Company will constitute a valid and binding
obligation of the Company enforceable against the Company in accordance with its
terms, subject to (i) bankruptcy, insolvency, reorganization, fraudulent
transfer, fraudulent conveyance, moratorium or other laws now or hereafter in
effect affecting creditors' rights generally, and (ii) general principles of
equity (including, without limitation, standards of materiality, good faith,
fair dealing and reasonableness) whether considered in a proceeding in equity or
at law.
2. The Junior Subordinated Debentures have been duly authorized by
the Company and when executed and issued by the Company, assuming due execution
and delivery of the Indenture by the Company, due authorization, execution and
delivery of the Indenture by the Trustee and due authentication of the Junior
Subordinated Debentures by the Trustee, will constitute valid and binding
obligations of the Company enforceable against the Company in accordance with
their terms, subject to (i) bankruptcy, insolvency, reorganization, fraudulent
transfer, fraudulent conveyance, moratorium or other laws now or hereafter in
effect affecting creditors' rights generally, and (ii) general principles of
equity (including, without limitation, standards of materiality, good faith,
fair dealing and reasonableness) whether considered in a proceeding in equity or
at law.
This opinion is expressly limited to the laws of the State of New
York. Insofar as our opinion involves the laws of the State of Maryland, we
have relied with your consent solely on the opinion of Bruce I. Rothschild,
Esq., General Counsel of the Company, addressed to us of even date herewith, a
copy of which is attached hereto. To the extent that such opinion contains
conditions and limitations, we are incorporating such conditions and limitations
herein.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the references to this firm under the caption
"Validity of Securities" in the Prospectus forming a part of the Registration
Statement. In giving these consents, we do not hereby admit that we are in the
category of persons whose consent is required under Section 7 of the Securities
Act.
<PAGE>
-3-
The Rouse Company November 20, 1995
The opinions expressed herein are solely for the benefit of The Rouse
Company and Rouse Capital.
Very truly yours,
FRIED, FRANK, HARRIS, SHRIVER & JACOBSON
By: /s/ Timothy E. Peterson
-------------------------
Timothy E. Peterson
<PAGE>
EXHIBIT 5.3
November 20, 1995
The Rouse Company
10275 Little Patuxent Parkway
Columbia, Maryland 21044-3456
Fried, Frank, Harris,
Shriver & Jacobson
One New York Plaza
New York, New York 10004
Ladies and Gentlemen:
I have acted as counsel for The Rouse Company, a Maryland corporation
(the "Company"), in connection with the preparation of a Registration Statement
on Form S-3 (Nos. 33-63279 and 33-63279-01) under the Securities Act of 1933, as
amended (the "Securities Act") (together with any amendments thereto, and any
registration statement that may be filed pursuant to Rule 462(b) under the
Securities Act, the "Registration Statement") with respect to (i) the Guarantee
to be issued by the Company to The First National Bank of Chicago, as trustee
for the benefit of the holders of the __% Cumulative Quarterly Income Preferred
Securities of Rouse Capital and registered under the Registration Statement (the
"Gurantee") and (ii) the Company's __% Junior Subordinated Debentures due 2025
registered under the Registration Statement (the "Junior Subordinated
Debentures"). The Junior Subordinated Debentures are to be issued to Rouse
Capital under an Indenture (the "Indenture") between the Company and The First
National Bank of Chicago, as trustee (the "Trustee").
In that capacity, I have examined the originals, or certified,
confirmed or reproduction copies, of all corporate proceedings, records,
agreements, instruments and documents, and such statutory, constitutional and
other material as I have deemed relevant or necessary as the basis for the
opinions hereinafter expressed. In connection therewith, I have assumed the
genuineness of all signatures on original or certified copies and the conformity
to original or certified copies of all copies submitted to me as conformed or
reproduction copies. As to various questions of fact relevant to such opinions,
I have relied upon certificates and statements of public officials and officers
or representatives of the Company and others.
Based upon the foregoing, and subject to the limitations set forth
herein, I am of the opinion that:
<PAGE>
-2-
The Rouse House
Fried, Frank, Harris,
Shriver & Jacobson November 20, 1995
1. The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Maryland.
2. The Company has all the requisite corporate power and authority
to enter into each of the Guarantee and the Indenture and to issue the Junior
Subordinated Debentures and to perform its obligations thereunder.
3. Execution and delivery of each of the Guarantee, the Indenture
and the Junior Subordinated Debentures have been duly authorized by the Company.
I wish to advise you that I am a member of the Maryland Bar and
accordingly limit the opinions expressed herein to matters of the laws of the
State of Maryland.
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the references to my opinion under the caption
"Validity of Securities" in the Prospectus forming a part of the Registration
Statement. I hereby also consent to the reliance on this opinion by Fried,
Frank, Harris, Shriver & Jacobson. Except as specifically provided above, this
opinion may not be quoted or relied upon by any other person without my prior
consent.
Very truly yours,
/s/ Bruce I. Rothschild
<PAGE>
EXHIBIT 8.1
859-8278
(FAX: 212-859-8588)
November 20, 1995
The Rouse Company
10275 Little Patuxent Parkway
Columbia, Maryland 21044-3456
Rouse Capital
c/o The Rouse Company
10275 Little Patuxent Parkway
Columbia, Maryland 21044-3456
Ladies and Gentlemen:
We have acted as your special tax counsel in connection with your
Registration Statement on Form S-3, and any related registration statement that
may be filed pursuant to Rule 462(b) under the Securities Act of 1933, as
amended (collectively, the "Registration Statement"), filed with the
Securities and Exchange Commission, with respect to the public offering of __%
Cumulative Quarterly Income Preferred Securities thereunder (the "Preferred
Securities").
We hereby confirm, based on the assumptions and subject to the
qualifications and limitations set forth therein, that the statements in the
section of the Registration Statement captioned "Certain United States Federal
Income Tax Considerations," to the
<PAGE>
The Rouse Company
Rouse Capital -2- November 20, 1995
extent that such statements constitute statements of law, reflect our opinion,
as of the date hereof, with respect to the matters set forth therein regarding
federal income tax consequences of the purchase, ownership, and disposition of
the Preferred Securities. No opinion is expressed on matters other than those
specifically referred to herein.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving this consent, we do not hereby admit that we
are in the category of persons whose consent is required under Section 7 of the
Securities Act.
The opinion expressed herein is solely for your benefit and may not be
relied upon in any manner or for any purpose by any other person.
Very truly yours,
FRIED, FRANK, HARRIS, SHRIVER & JACOBSON
By: /s/ Robert Cassanos
---------------------------------
Robert Cassanos
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors of The Rouse Company:
We consent to the use of our report incorporated herein by reference and to
the reference to our firm under the heading "Experts" in the prospectus.
/s/ KPMG Peat Marwick LLP
_____________________________________
KPMG Peat Marwick LLP
Baltimore, Maryland
November 20, 1995
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT REAL ESTATE CONSULTANTS
The Board of Directors of The Rouse Company:
We consent to the incorporation by reference in Amendment No. 3 to the
Registration Statement of The Rouse Company (the "Company") and Rouse Capital
on Form S-3 (Registration Nos. 33-63279 and 33-63279-01) of our report dated
February 21, 1995, on our concurrence with the Company's estimates of the
market value of its equity and other interests in certain real property owned
and/or managed by the Company and its subsidiaries as of December 31, 1994 and
1993, which report appears on page 19 of the 1994 Annual Report to
Shareholders that is incorporated by reference in the Annual Report on Form
10-K of the Company for the year ended December 31, 1994, and to the reference
to our firm under the heading "Experts" in the Prospectus that is a part of
such Registration Statement.
/s/ Deborah A. Jackson
_____________________________________
Landauer Associates, Inc.
New York, New York
November 20, 1995
<PAGE>
EXHIBIT 25.1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM T-1
--------
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) _____
---------------------------------
THE FIRST NATIONAL BANK OF CHICAGO
(EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER)
A NATIONAL BANKING ASSOCIATION 36-0899825
(I.R.S. EMPLOYER
IDENTIFICATION NUMBER)
ONE FIRST NATIONAL PLAZA, CHICAGO, ILLINOIS 60670-0126
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
THE FIRST NATIONAL BANK OF CHICAGO
ONE FIRST NATIONAL PLAZA, SUITE 0286
CHICAGO, ILLINOIS 60670-0286
ATTN: LYNN A. GOLDSTEIN, LAW DEPARTMENT (312) 732-6919
(NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE)
-----------------------------------
THE ROUSE COMPANY
(EXACT NAME OF OBLIGOR AS SPECIFIED IN ITS CHARTER)
MARYLAND 52-0735512
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
10275 LITTLE PATUXENT PARKWAY
COLUMBIA, MARYLAND 21044-3456
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
% JUNIOR SUBORDINATED DEBENTURES
(TITLE OF INDENTURE SECURITIES)
<PAGE>
ITEM 1. GENERAL INFORMATION. FURNISH THE FOLLOWING
--------------------
INFORMATION AS TO THE TRUSTEE:
(A) NAME AND ADDRESS OF EACH EXAMINING OR
SUPERVISING AUTHORITY TO WHICH IT IS SUBJECT.
Comptroller of Currency, Washington, D.C.,
Federal Deposit Insurance Corporation,
Washington, D.C., The Board of Governors of
the Federal Reserve System, Washington D.C.
(B) WHETHER IT IS AUTHORIZED TO EXERCISE
CORPORATE TRUST POWERS.
The trustee is authorized to exercise corporate
trust powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR. IF THE OBLIGOR
------------------------------
IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH
SUCH AFFILIATION.
No such affiliation exists with the trustee.
ITEM 16. LIST OF EXHIBITS. LIST BELOW ALL EXHIBITS FILED AS A
-----------------
PART OF THIS STATEMENT OF ELIGIBILITY.
1. A copy of the articles of association of the
trustee now in effect.*
2. A copy of the certificates of authority of the
trustee to commence business.*
3. A copy of the authorization of the trustee to
exercise corporate trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by
Section 321(b) of the Act.
2
<PAGE>
7. A copy of the latest report of condition of the
trustee published pursuant to law or the
requirements of its supervising or examining
authority.
8. Not Applicable.
9. Not Applicable.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, The First National Bank of Chicago, a national
banking association organized and existing under the laws of the United
States of America, has duly caused this Statement of Eligibility to be
signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of Chicago and State of Illinois, on the 13th day of November,
1995
THE FIRST NATIONAL BANK OF CHICAGO,
TRUSTEE,
BY /S/ R. D. MANELLA
R. D. MANELLA
VICE PRESIDENT
* EXHIBITS 1,2,3 AND 4 ARE HEREIN INCORPORATED BY REFERENCE TO EXHIBITS BEARING
IDENTICAL NUMBERS IN ITEM 12 OF THE FORM T-1 OF THE FIRST NATIONAL BANK OF
CHICAGO, FILED AS EXHIBIT 26 TO THE REGISTRATION STATEMENT ON FORM S-3 OF THE
CIT GROUP HOLDINGS, INC., FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON
FEBRUARY 16, 1993 (REGISTRATION NO. 33-58418).
3
<PAGE>
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
November 13, 1995
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
In connection with the qualification of an indenture between The Rouse Company
and The First National Bank of Chicago, the undersigned, in accordance with
Section 321(b) of the Trust Indenture Act of 1939, as amended, hereby consents
that the reports of examinations of the undersigned, made by Federal or State
authorities authorized to make such examinations, may be furnished by such
authorities to the Securities and Exchange Commission upon its request therefor.
VERY TRULY YOURS,
THE FIRST NATIONAL BANK OF CHICAGO
BY: /S/ R. D. MANELLA
R. D. MANELLA
VICE PRESIDENT
4
<PAGE>
EXHIBIT 7
Legal Title of Bank: The First National Bank of Chicago
Address: One First National Plaza, Suite 0460
City, State Zip: Chicago, IL 60670-0460
FDIC Certificate No.: 0/3/6/1/8
---------
Call Date: 06/30/95 ST-BK: 17-1630 FFIEC 031 Page RC-1
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS FOR JUNE 30, 1995
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding of the last business day of the
quarter.
SCHEDULE RC--BALANCE SHEET
<TABLE>
<CAPTION>
C400
DOLLAR AMOUNTS IN ------------ |--
THOUSANDS RCFD BIL MIL THOU ------
----------------- ---- ------------
<S> <C> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions (from Schedule
RC-A):
a. Noninterest-bearing balances and currency and coin(1)................ 0081 3,184,875 1.a.
b. Interest-bearing balances(2)......................................... 0071 8,932,069 1.b.
2. Securities
a. Held-to-maturity securities(from Schedule RC-B, column A)............ 1754 249,502 2.a.
b. Available-for-sale securities (from Schedule RC-B, column D)......... 1773 536,856 2.b.
3. Federal funds sold and securities purchased under agreements to
resell in domestic offices of the bank and its Edge and Agreement
subsidiaries, and in IBFs:
a. Federal Funds sold................................................... 0276 2,897,736 3.a.
b. Securities purchased under agreements to resell...................... 0277 1,417,129 3.b.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income (from Schedule RC-C)........ RCFD 2122 16,567,408 4.a.
b. LESS: Allowance for loan and lease losses............................ RCFD 3123 358,877 4.b.
c. LESS: Allocated transfer risk reserve................................ RCFD 3128 0 4.c.
d. Loans and leases, net of unearned income, allowance, and
reserve (item 4.a minus 4.b and 4.c)................................. 2125 16,208,531 4.d.
5. Assets held in trading accounts........................................ 3545 13,486,931 5.
6. Premises and fixed assets (including capitalized leases)............... 2145 516,279 6.
7. Other real estate owned (from Schedule RC-M)........................... 2150 11,216 7.
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M)......................................... 2130 12,946 8.
9. Customers' liability to this bank on acceptances outstanding........... 2155 501,943 9.
10. Intangible assets (from Schedule RC-M)................................. 2143 111,683 10.
11. Other assets (from Schedule RC-F)...................................... 2160 1,258,270 11.
12. Total assets (sum of items 1 through 11)............................... 2170 49,325,966 12.
- ------------------
</TABLE>
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held in trading accounts.
5
<PAGE>
Legal Title of Bank: The First National Bank of Chicago
Address: One First National Plaza, Suite 0460
City, State Zip: Chicago, IL 60670-0460
FDIC Certificate No.: 0/3/6/1/8
---------
Call Date: 06/30/95 ST-BK: 17-1630 FFIEC 031 Page RC-2
SCHEDULE RC-CONTINUED
<TABLE>
<CAPTION>
DOLLAR AMOUNTS IN
THOUSANDS BIL MIL THOU
----------------- ------------
<S> <C> <C> <C> <C>
LIABILITIES
13. Deposits:
a. In domestic offices (sum of totals of columns A and C
from Schedule RC-E, part 1)................................... RCON 2200 14,889,235 13.a.
(1) Noninterest-bearing(1)....................................... RCON 6631 5,895,584 13.a.(1)
(2) Interest-bearing............................................. RCON 6636 8,993,651 13.a.(2)
b. In foreign offices, Edge and Agreement subsidiaries, and
IBFs (from Schedule RC-E, part II)............................ RCFN 2200 13,289,760 13.b.
(1) Noninterest bearing.......................................... RCFN 6631 315,549 13.b.(1)
(2) Interest-bearing............................................. RCFN 6636 12,974,211 13.b.(2)
14. Federal funds purchased and securities sold under agreements
to repurchase in domestic offices of the bank and of
its Edge and Agreement subsidiaries, and in IBFs:
a. Federal funds purchased....................................... RCFD 0278 2,942,186 14.a.
b. Securities sold under agreements to repurchase................ RCFD 0279 1,160,512 14.b.
15. a. Demand notes issued to the U.S. Treasury...................... RCON 2840 112,768 15.a.
b. Trading Liabilities........................................... RCFD 3548 7,872,221 15.b.
16. Other borrowed money:
a. With original maturity of one year or less.................... RCFD 2332 2,402,829 16.a.
b. With original maturity of more than one year.................. RCFD 2333 643,987 16.b.
17. Mortgage indebtedness and obligations under capitalized
leases........................................................... RCFD 2910 278,108 17.
18. Bank's liability on acceptance executed and outstanding.......... RCFD 2920 501,943 18.
19. Subordinated notes and debentures................................ RCFD 3200 1,225,000 19.
20. Other liabilities (from Schedule RC-G)........................... RCFD 2930 981,938 20.
21. Total liabilities (sum of items 13 through 20)................... RCFD 2948 46,300,487 21.
22. Limited-Life preferred stock and related surplus................. RCFD 3282 0 22.
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus.................... RCFD 3838 0 23.
24. Common stock..................................................... RCFD 3230 200,858 24.
25. Surplus (exclude all surplus related to preferred stock)......... RCFD 3839 2,314,642 25.
26. a. Undivided profits and capital reserves........................ RCFD 3632 510,093 26.a.
b. Net unrealized holding gains (losses) on available-for-sale
securities.................................................... RCFD 8434 (880) 26.b.
27. Cumulative foreign currency translation adjustments.............. RCFD 3284 766 27.
28. Total equity capital (sum of items 23 through 27)................ RCFD 3210 3,025,479 28.
29. Total liabilities, limited-life preferred stock, and equity
capital (sum of items 21, 22, and 28)............................ RCFD 3300 49,325,966 29.
</TABLE>
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that
best describes the most comprehensive level of auditing work performed for
the bank by independent external Number
auditors as of any date during 1993.................. RCFD 6724 N/A M.1.
1 = Independent audit of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm which
submits a report on the bank
2 = Independent audit of the bank's parent holding company conducted in
accordance with generally accepted auditing standards by a certified public
accounting firm which submits a report on the consolidated holding company
(but not on the bank separately)
3 = Directors' examination of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm (may be
required by state chartering authority)
4 = Directors' examination of the bank performed by other external auditors
(may be required by state chartering authority)
5 = Review of the bank's financial statements by external auditors
6 = Compilation of the bank's financial statements by external auditors
7 = Other audit procedures (excluding tax preparation work)
8 = No external audit work
- -------------------
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
6
<PAGE>
EXHIBIT 25.2
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM T-1
--------
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) _____
---------------------------------
THE FIRST NATIONAL BANK OF CHICAGO
(EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER)
A NATIONAL BANKING ASSOCIATION 36-0899825
(I.R.S. EMPLOYER
IDENTIFICATION NUMBER)
ONE FIRST NATIONAL PLAZA, CHICAGO, ILLINOIS 60670-0126
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
THE FIRST NATIONAL BANK OF CHICAGO
ONE FIRST NATIONAL PLAZA, SUITE 0286
CHICAGO, ILLINOIS 60670-0286
ATTN: LYNN A. GOLDSTEIN, LAW DEPARTMENT (312) 732-6919
(NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE)
-----------------------------------
ROUSE CAPITAL
(EXACT NAME OF OBLIGOR AS SPECIFIED IN ITS CHARTER)
DELAWARE TO BE APPLIED FOR
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
C/O THE ROUSE COMPANY
10275 PATUXENT PARKWAY
COLUMBIA, MARYLAND 21004-3456
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
ROUSE CAPITAL % CUMULATIVE QUARTERLY INCOME PREFERRED SECURITIES
(TITLE OF INDENTURE SECURITIES)
<PAGE>
ITEM 1. GENERAL INFORMATION. FURNISH THE FOLLOWING
--------------------
INFORMATION AS TO THE TRUSTEE:
(a) NAME AND ADDRESS OF EACH EXAMINING OR
SUPERVISING AUTHORITY TO WHICH IT IS SUBJECT.
Comptroller of Currency, Washington, D.C.,
Federal Deposit Insurance Corporation,
Washington, D.C., The Board of Governors of
the Federal Reserve System, Washington D.C.
(b) WHETHER IT IS AUTHORIZED TO EXERCISE
CORPORATE TRUST POWERS.
The trustee is authorized to exercise corporate
trust powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR. IF THE OBLIGOR
------------------------------
IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH
SUCH AFFILIATION.
No such affiliation exists with the trustee.
ITEM 16. LIST OF EXHIBITS. LIST BELOW ALL EXHIBITS FILED AS A
-----------------
PART OF THIS STATEMENT OF ELIGIBILITY.
1. A copy of the articles of association of the
trustee now in effect.*
2. A copy of the certificates of authority of the
trustee to commence business.*
3. A copy of the authorization of the trustee to
exercise corporate trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by
Section 321(b) of the Act.
2
<PAGE>
7. A copy of the latest report of condition of the
trustee published pursuant to law or the
requirements of its supervising or examining
authority.
8. Not Applicable.
9. Not Applicable.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, The First National Bank of Chicago, a national
banking association organized and existing under the laws of the United
States of America, has duly caused this Statement of Eligibility to be
signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of Chicago and State of Illinois, on the 13th day of November,
1995
THE FIRST NATIONAL BANK OF CHICAGO,
TRUSTEE,
BY /s/ R. D. MANELLA
R. D. MANELLA
VICE PRESIDENT
* EXHIBITS 1,2,3 AND 4 ARE HEREIN INCORPORATED BY REFERENCE TO EXHIBITS BEARING
IDENTICAL NUMBERS IN ITEM 12 OF THE FORM T-1 OF THE FIRST NATIONAL BANK OF
CHICAGO, FILED AS EXHIBIT 26 TO THE REGISTRATION STATEMENT ON FORM S-3 OF THE
CIT GROUP HOLDINGS, INC., FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON
FEBRUARY 16, 1993 (REGISTRATION NO. 33-58418).
3
<PAGE>
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
November 13, 1995
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
In connection with the qualification of an Amended and Restated Declaration of
Trust of Rouse Captial, the undersigned, in accordance with Section 321(b) of
the Trust Indenture Act of 1939, as amended, hereby consents that the reports of
examinations of the undersigned, made by Federal or State authorities authorized
to make such examinations, may be furnished by such authorities to the
Securities and Exchange Commission upon its request therefor.
Very truly yours,
THE FIRST NATIONAL BANK OF CHICAGO
BY: /s/ R. D. MANELLA
R. D. MANELLA
VICE PRESIDENT
4
<PAGE>
EXHIBIT 7
Legal Title of Bank: The First National Bank of Chicago
Address: One First National Plaza, Suite 0460
City, State Zip: Chicago, IL 60670-0460
FDIC Certificate No.: 0/3/6/1/8
---------
Call Date: 06/30/95 ST-BK: 17-1630 FFIEC 031
Page RC-1
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS FOR JUNE 30, 1995
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding of the last business day of the
quarter.
SCHEDULE RC--BALANCE SHEET
<TABLE>
<CAPTION>
C400
DOLLAR AMOUNTS IN ------------
THOUSANDS RCFD BIL MIL THOU |--
------------------ ---- ------------ ------
<S> <C> <C> <C> <C>
ASSETS
1. Cash and balances due from depository
institutions (from Schedule RC-A):
a. Noninterest-bearing balances and currency
and coin(1)................................... 0081 3,184,875 1.a.
b. Interest-bearing balances(2).................. 0071 8,932,069 1.b.
2. Securities
a. Held-to-maturity securities
(from Schedule RC-B, column A)................ 1754 249,502 2.a.
b. Available-for-sale securities (from
Schedule RC-B, column D)...................... 1773 536,856 2.b.
3. Federal funds sold and securities purchased
under agreements to resell in domestic offices
of the bank and its Edge and Agreement
subsidiaries, and in IBFs:
a. Federal Funds sold............................ 0276 2,897,736 3.a.
b. Securities purchased under agreements to
resell........................................ 0277 1,417,129 3.b.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income
(from Schedule RC-C).......................... RCFD 2122 16,567,408 4.a.
b. LESS: Allowance for loan and
lease losses.................................. RCFD 3123 358,877 4.b.
c. LESS: Allocated transfer risk reserve......... RCFD 3128 0 4.c.
d. Loans and leases, net of
unearned income, allowance, and
reserve (item 4.a minus 4.b and 4.c).......... 2125 16,208,531 4.d.
5. Assets held in trading accounts.................. 3545 13,486,931 5.
6. Premises and fixed assets
(including capitalized leases)................... 2145 516,279 6.
7. Other real estate owned
(from Schedule RC-M)............................. 2150 11,216 7.
8. Investments in unconsolidated subsidiaries
and associated companies (from Schedule RC-M).... 2130 12,946 8.
9. Customers' liability to this bank on
acceptances outstanding.......................... 2155 501,943 9.
10. Intangible assets (from Schedule RC-M)........... 2143 111,683 10.
11. Other assets (from Schedule RC-F)................ 2160 1,258,270 11.
12. Total assets (sum of items 1 through 11)......... 2170 49,325,966 12.
</TABLE>
- ------------------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held in trading accounts.
5
<PAGE>
Legal Title of Bank: The First National Bank of Chicago
Address: One First National Plaza, Suite 0460
City, State Zip: Chicago, IL 60670-0460
FDIC Certificate No.: 0/3/6/1/8
---------
Call Date: 06/30/95 ST-BK: 17-1630 FFIEC 031
Page RC-2
SCHEDULE RC-CONTINUED
<TABLE>
<CAPTION>
DOLLAR AMOUNTS IN
THOUSANDS BIL MIL THOU
----------------- ------------
<S> <C> <C> <C> <C>
LIABILITIES
13. Deposits:
a. In domestic offices (sum of totals of
columns A and C from Schedule RC-E, part 1)..... RCON 2200 14,889,235 13.a.
(1) Noninterest-bearing(1)...................... RCON 6631 5,895,584 13.a.(1)
(2) Interest-bearing............................ RCON 6636 8,993,651 13.a.(2)
b. In foreign offices, Edge and Agreement
subsidiaries, and IBFs (from Schedule
RC-E, part II).................................. RCFN 2200 13,289,760 13.b.
(1) Noninterest bearing......................... RCFN 6631 315,549 13.b.(1)
(2) Interest-bearing............................ RCFN 6636 12,974,211 13.b.(2)
14. Federal funds purchased and securities sold
under agreements to repurchase in domestic
offices of the bank and of its Edge and Agreement
subsidiaries, and in IBFs:
a. Federal funds purchased......................... RCFD 0278 2,942,186 14.a.
b. Securities sold under agreements to repurchase.. RCFD 0279 1,160,512 14.b.
15. a. Demand notes issued to the U.S. Treasury........ RCON 2840 112,768 15.a.
b. Trading Liabilities............................. RCFD 3548 7,872,221 15.b.
16. Other borrowed money:
a. With original maturity of one year or less...... RCFD 2332 2,402,829 16.a.
b. With original maturity of more than one year.... RCFD 2333 643,987 16.b.
17. Mortgage indebtedness and obligations under
capitalized leases................................. RCFD 2910 278,108 17.
18. Bank's liability on acceptance executed
and outstanding.................................... RCFD 2920 501,943 18.
19. Subordinated notes and debentures.................. RCFD 3200 1,225,000 19.
20. Other liabilities (from Schedule RC-G)............. RCFD 2930 981,938 20.
21. Total liabilities (sum of items 13 through 20)..... RCFD 2948 46,300,487 21.
22. Limited-life preferred stock and related surplus... RCFD 3282 0 22.
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus...... RCFD 3838 0 23.
24. Common stock....................................... RCFD 3230 200,858 24.
25. Surplus (exclude all surplus related to
preferred stock)................................... RCFD 3839 2,314,642 25.
26. a. Undivided profits and capital reserves.......... RCFD 3632 510,093 26.a.
b. Net unrealized holding gains
(losses) on available-for-sale securities....... RCFD 8434 (880) 26.b.
27. Cumulative foreign currency translation adjustments RCFD 3284 766 27.
28. Total equity capital (sum of items 23 through 27).. RCFD 3210 3,025,479 28.
29. Total liabilities, limited-life preferred stock,
and equity capital (sum of items 21, 22, and 28)... RCFD 3300 49,325,966 29.
</TABLE>
<TABLE>
Memorandum
<S> <C> <C>
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that
best describes the most comprehensive level of auditing work performed
for the bank by independent external Number
auditors as of any date during 1993................................................... RCFD 6724 N/A M.1.
</TABLE>
1 = Independent audit of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm which
submits a report on the bank
2 = Independent audit of the bank's parent holding company conducted in
accordance with generally accepted auditing standards by a certified public
accounting firm which submits a report on the consolidated holding company
(but not on the bank separately)
3 = Directors' examination of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm (may be
required by state chartering authority)
4 = Directors' examination of the bank performed by other external auditors
(may be required by state chartering authority)
5 = Review of the bank's financial statements by external auditors
6 = Compilation of the bank's financial statements by external auditors
7 = Other audit procedures (excluding tax preparation work)
8 = No external audit work
- -------------------
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
6
<PAGE>
EXHIBIT 25.3
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM T-1
--------
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) _____
---------------------------------
THE FIRST NATIONAL BANK OF CHICAGO
(EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER)
A NATIONAL BANKING ASSOCIATION 36-0899825
(I.R.S. EMPLOYER
IDENTIFICATION NUMBER)
ONE FIRST NATIONAL PLAZA, CHICAGO, ILLINOIS 60670-0126
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
THE FIRST NATIONAL BANK OF CHICAGO
ONE FIRST NATIONAL PLAZA, SUITE 0286
CHICAGO, ILLINOIS 60670-0286
ATTN: LYNN A. GOLDSTEIN, LAW DEPARTMENT (312) 732-6919
(NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE)
-----------------------------------
THE ROUSE COMPANY
(EXACT NAME OF OBLIGOR AS SPECIFIED IN ITS CHARTER)
MARYLAND 52-0735512
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
10275 LITTLE PATUXENT PARKWAY
COLUMBIA, MARYLAND 21044-3456
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
GUARANTEE OF THE ROUSE COMPANY WITH RESPECT TO ROUSE CAPITAL
% CUMULATIVE QUARTERLY INCOME PREFERRED SECURITIES
(TITLE OF INDENTURE SECURITIES)
<PAGE>
ITEM 1. GENERAL INFORMATION. FURNISH THE FOLLOWING
--------------------
INFORMATION AS TO THE TRUSTEE:
(a) NAME AND ADDRESS OF EACH EXAMINING OR
SUPERVISING AUTHORITY TO WHICH IT IS SUBJECT.
Comptroller of Currency, Washington, D.C.,
Federal Deposit Insurance Corporation,
Washington, D.C., The Board of Governors of
the Federal Reserve System, Washington D.C.
(b) WHETHER IT IS AUTHORIZED TO EXERCISE
CORPORATE TRUST POWERS.
The trustee is authorized to exercise corporate
trust powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR. IF THE OBLIGOR
------------------------------
IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH
SUCH AFFILIATION.
No such affiliation exists with the trustee.
ITEM 16. LIST OF EXHIBITS. LIST BELOW ALL EXHIBITS FILED AS A
-----------------
PART OF THIS STATEMENT OF ELIGIBILITY.
1. A copy of the articles of association of the
trustee now in effect.*
2. A copy of the certificates of authority of the
trustee to commence business.*
3. A copy of the authorization of the trustee to
exercise corporate trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by
Section 321(b) of the Act.
2
<PAGE>
7. A copy of the latest report of condition of the
trustee published pursuant to law or the
requirements of its supervising or examining
authority.
8. Not Applicable.
9. Not Applicable.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, The First National Bank of Chicago, a national
banking association organized and existing under the laws of the United
States of America, has duly caused this Statement of Eligibility to be
signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of Chicago and State of Illinois, on the 13th day of November,
1995
THE FIRST NATIONAL BANK OF CHICAGO,
TRUSTEE,
BY /S/ R. D. MANELLA
R. D. MANELLA
VICE PRESIDENT
* EXHIBITS 1,2,3 AND 4 ARE HEREIN INCORPORATED BY REFERENCE TO EXHIBITS BEARING
IDENTICAL NUMBERS IN ITEM 12 OF THE FORM T-1 OF THE FIRST NATIONAL BANK OF
CHICAGO, FILED AS EXHIBIT 26 TO THE REGISTRATION STATEMENT ON FORM S-3 OF THE
CIT GROUP HOLDINGS, INC., FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON
FEBRUARY 16, 1993 (REGISTRATION NO. 33-58418).
3
<PAGE>
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
November 13, 1995
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
In connection with the qualification of a Guarantee Agreement of The Rouse
Company , the undersigned, in accordance with Section 321(b) of the Trust
Indenture Act of 1939, as amended, hereby consents that the reports of
examinations of the undersigned, made by Federal or State authorities authorized
to make such examinations, may be furnished by such authorities to the
Securities and Exchange Commission upon its request therefor.
VERY TRULY YOURS,
THE FIRST NATIONAL BANK OF CHICAGO
BY: /S/ R. D. MANELLA
R. D. MANELLA
VICE PRESIDENT
4
<PAGE>
EXHIBIT 7
Legal Title of Bank: The First National Bank of Chicago
Address: One First National Plaza, Suite 0460
City, State Zip: Chicago, IL 60670-0460
FDIC Certificate No.: 0/3/6/1/8
---------
Call Date: 06/30/95 ST-BK: 17-1630 FFIEC 031 Page RC-1
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS FOR JUNE 30, 1995
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding of the last business day of the
quarter.
SCHEDULE RC--BALANCE SHEET
<TABLE>
<CAPTION>
C400 |-
DOLLAR AMOUNTS IN -------- ----
THOUSANDS RCFD BIL MIL THOU
----------------- ---- ------------
ASSETS
<S> <C> <C> <C>
1. Cash and balances due from depository institutions (from Schedule
RC-A):
a. Noninterest-bearing balances and currency and coin(1)............ 0081 3,184,875 1.a.
b. Interest-bearing balances(2)..................................... 0071 8,932,069 1.b.
2. Securities
a. Held-to-maturity securities(from Schedule RC-B, column A)........ 1754 249,502 2.a.
b. Available-for-sale securities (from Schedule RC-B, column D)..... 1773 536,856 2.b.
3. Federal funds sold and securities purchased under agreements to
resell in domestic offices of the bank and its Edge and Agreement
subsidiaries, and in IBFs:
a. Federal Funds sold............................................... 0276 2,897,736 3.a.
b. Securities purchased under agreements to resell.................. 0277 1,417,129 3.b.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income (from Schedule
RC-C)............................................................... RCFD 2122 16,567,408 4.a.
b. LESS: Allowance for loan and lease losses........................ RCFD 3123 358,877 4.b.
c. LESS: Allocated transfer risk reserve............................ RCFD 3128 0 4.c.
d. Loans and leases, net of unearned income, allowance, and
reserve (item 4.a minus 4.b and 4.c)............................. 2125 16,208,531 4.d.
5. Assets held in trading accounts..................................... 3545 13,486,931 5.
6. Premises and fixed assets (including capitalized leases)............ 2145 516,279 6.
7. Other real estate owned (from Schedule RC-M)........................ 2150 11,216 7.
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M)...................................... 2130 12,946 8.
9. Customers' liability to this bank on acceptances outstanding........ 2155 501,943 9.
10. Intangible assets (from Schedule RC-M).............................. 2143 111,683 10.
11. Other assets (from Schedule RC-F)................................... 2160 1,258,270 11.
12. Total assets (sum of items 1 through 11)............................ 2170 49,325,966 12.
</TABLE>
- ------------------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held in trading accounts.
5
<PAGE>
Legal Title of Bank: The First National Bank of Chicago
Address: One First National Plaza, Suite 0460
City, State Zip: Chicago, IL 60670-0460
FDIC Certificate No.: 0/3/6/1/8
---------
Call Date: 06/30/95 ST-BK: 17-1630 FFIEC 031 Page RC-2
SCHEDULE RC-CONTINUED
<TABLE>
<CAPTION>
DOLLAR AMOUNTS IN
THOUSANDS BIL MIL THOU
----------------- ------------
<S> <C> <C> <C> <C>
LIABILITIES
13. Deposits:
a. In domestic offices (sum of totals of columns A and C
from Schedule RC-E, part 1)................................ RCON 2200 14,889,235 13.a.
(1) Noninterest-bearing(1)................................. RCON 6631 5,895,584 13.a.(1)
(2) Interest-bearing....................................... RCON 6636 8,993,651 13.a.(2)
b. In foreign offices, Edge and Agreement subsidiaries, and
IBFs (from Schedule RC-E, part II)......................... RCFN 2200 13,289,760 13.b.
(1) Noninterest bearing.................................... RCFN 6631 315,549 13.b.(1)
(2) Interest-bearing....................................... RCFN 6636 12,974,211 13.b.(2)
14. Federal funds purchased and securities sold under agreements
to repurchase in domestic offices of the bank and of
its Edge and Agreement subsidiaries, and in IBFs:
a. Federal funds purchased.................................... RCFD 0278 2,942,186 14.a.
b. Securities sold under agreements to repurchase............. RCFD 0279 1,160,512 14.b.
15. a. Demand notes issued to the U.S. Treasury................... RCON 2840 112,768 15.a.
b. Trading Liabilities........................................ RCFD 3548 7,872,221 15.b.
16. Other borrowed money:
a. With original maturity of one year or less................. RCFD 2332 2,402,829 16.a.
b. With original maturity of more than one year............... RCFD 2333 643,987 16.b.
17. Mortgage indebtedness and obligations under capitalized
leases........................................................ RCFD 2910 278,108 17.
18. Bank's liability on acceptance executed and outstanding....... RCFD 2920 501,943 18.
19. Subordinated notes and debentures............................. RCFD 3200 1,225,000 19.
20. Other liabilities (from Schedule RC-G)........................ RCFD 2930 981,938 20.
21. Total liabilities (sum of items 13 through 20)................ RCFD 2948 46,300,487 21.
22. Limited-Life preferred stock and related surplus.............. RCFD 3282 0 22.
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus................. RCFD 3838 0 23.
24. Common stock.................................................. RCFD 3230 200,858 24.
25. Surplus (exclude all surplus related to preferred stock)...... RCFD 3839 2,314,642 25.
26. a. Undivided profits and capital reserves..................... RCFD 3632 510,093 26.a.
b. Net unrealized holding gains (losses) on available-for-sale
securities................................................. RCFD 8434 (880) 26.b.
27. Cumulative foreign currency translation adjustments........... RCFD 3284 766 27.
28. Total equity capital (sum of items 23 through 27)............. RCFD 3210 3,025,479 28.
29. Total liabilities, limited-life preferred stock, and equity
capital (sum of items 21, 22, and 28)......................... RCFD 3300 49,325,966 29.
</TABLE>
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that
best describes the most comprehensive level of auditing work performed for
the bank by independent external
Number
auditors as of any date during 1993................ RCFD 6724 N/A M.1.
1 = Independent audit of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm which
submits a report on the bank
2 = Independent audit of the bank's parent holding company conducted in
accordance with generally accepted auditing standards by a certified public
accounting firm which submits a report on the consolidated holding company
(but not on the bank separately)
3 = Directors' examination of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm (may be
required by state chartering authority)
4 = Directors' examination of the bank performed by other external auditors
(may be required by state chartering authority)
5 = Review of the bank's financial statements by external auditors
6 = Compilation of the bank's financial statements by external auditors
7 = Other audit procedures (excluding tax preparation work)
8 = No external audit work
- -------------------
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
6
